Managerial remuneration payable under the Companies Act 2013

• Overall management compensation payable by a public business to its directors, managing director, and full-time director, as well as its manager, for each fiscal year:

Condition Max Remuneration in any financial year
Company with one Managing director/whole time director/manager 5% of the net profits of the company
Company with more than one Managing director/whole time director/manager 10% of the net profits of the company
Overall Limit on Managerial Remuneration 11% of the net profits of the company
Remuneration payable to directors who are neither managing directors nor whole-time directors
For directors who are neither managing director or whole-time directors 1% of the net profits of the company if there is a managing director/whole time director
If there is a director who is neither a Managing director/whole time director 3% of the net profits of the company if there is no managing director/whole time director
The aforementioned percentages are exclusive of any fees due under section 197. (5). Prior to this point, any managerial compensation over 11% required government approval. Yet, a public business may now pay its managerial staff compensation in excess of 11% without prior clearance from the Central Government. The shareholders’ approval of a special resolution will suffice. If a corporation has defaulted on its obligations or failed to fulfil its obligations, authorization from the lenders will be required.

When a corporation has insufficient or no profits: In the event that a corporation has insufficient or no earnings in any fiscal year, no compensation shall be paid unless these rules are met.

Where the effective capital is: Limits of yearly remuneration
Negative or less than 5 Crores 60 Lakhs
5 crores and above but less than 100 Crores 84 Lakhs
100 Crores and above but less than 250 Crores 120 Lakhs
250 Crores and above 120 Lakhs plus 0.01% of the effective capital in excess of 250 Crores