Paytm’s Salary Cut: Oh No! Board Members Hit by Big Cuts

Paytm has recently made a significant change in the salaries of its Non-Executive Independent Directors on the board. Previously, these members were receiving salaries in crores, but the company has now put a cap on it. According to the new salary structure, no board member will earn more than ₹48 lakh annually.

From Crores to Lakhs: A Major Cut in Salaries

Earlier, the salaries of some Paytm board members were sky-high. For instance, Mr. Ashit Ranjit Lilani was receiving ₹1.65 crore annually, and Mr. Gopalasamudram Srinivasaraghavan Sundararajan was earning ₹2.07 crore annually. Now, if you compare these figures to ₹48 lakh, the difference is quite stark. The company has drastically reduced these crore-level salaries to a fixed ₹48 lakh per year.

What’s the New Salary Formula?

Under the new structure, each Non-Executive Independent Director’s annual salary will have a fixed component of ₹20 lakh. The rest of the salary will be variable, depending on how many meetings they attend and the responsibilities they take on. This way, the company has made the salary structure somewhat flexible, ensuring that those who work harder and take on more responsibilities will earn more.

Why the Salary Cut? Here’s the Reason!

Paytm has cited several reasons behind this decision. The company stated that it benchmarked its salary structure against other companies with similar business models. Additionally, the aim is to promote good governance practices within the company.

As the saying goes, “Cut your coat according to your cloth.” Paytm’s decision reflects this philosophy. The company is taking steps to reduce its expenses and accelerate its path to profitability. The board members have supported this decision, indicating that they are willing to work shoulder-to-shoulder with the company in its journey forward.

What Are the New Twists and Turns in the Board?

Paytm didn’t stop at just changing the salary structure; they also made some other changes to their board. The company is seeking shareholder approval to reappoint Ravi Chandra Adusumalli, the Founder and Co-Managing Partner of Elevation Capital, to the board. Although Ravi Chandra Adusumalli is set to retire, the company wants him to continue on the board.

Elevation Capital has been a partner of Paytm since its early days, and with this new change, Paytm is trying to bring even stronger leadership into its board. The company wants to ensure that only those who can make the best decisions for the company are part of its board.

What Does This Decision Mean for Shareholders?

Paytm’s decision sends a clear message – the company is not just thinking about its profits but is also focusing on governance and financial planning. This is a positive sign for shareholders, as it shows that the company is managing its expenses wisely while moving toward profitability.

This decision also indicates that Paytm wants to retain only those board members who can work for the betterment of the company. The salary cut shows that the company is committed to strengthening its financial position.

Paytm’s masterstroke demonstrates that the company is planning to move forward in the right direction by cutting unnecessary expenses. This change will not only improve the company’s financial position but also strengthen Paytm’s governance. It will be interesting to see how Paytm climbs new heights with its new salary structure and board changes.

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