Sun TV promoter Kalanithi Maran and his wife ask board to cap compensation

By limiting the compensation, the couple would be foregoing around Rs 350 mn, based on an analyst's projections of Sun TV's profits for the current fiscal

Sun TV's promoter Kalanithi Maran and his wife Kauvery Kalanithi have taken a cut in their compensation for 2018-19.

The couple, which is among the highest paid executives of India Inc, wrote to the Board saying their gross compensation, including salary bonus ex gratia etc, to be capped at the same level as it was in the previous fiscal year(2017-2018).

While the quantum was not mentioned, analysts and internal sources say the amount would aggregate to Rs 1.75 billion.

By limiting the compensation, the couple would be foregoing around Rs 350 million based on an analyst’s projections of Sun TV’s profits for the current fiscal.

The decision to reduce their pay for the year has also coincided with the doubling of the quarterly dividend from Rs 2.50 a share to Rs 5 a share. Sun TV has a practice of paying out dividends on a quarterly basis and at the new level the distribution could well translate to Rs 9.60 billion of dividend outflow for the year. Maran alone holds around 75 per cent of the company's shares.

It may be noted that for the quarter ended June 2018, the revenues were up by around 42 per cent at Rs 11.20 billion from Rs 7.86 billion for the corresponding quarter ended in 2017. Advertisement revenues maintained a healthy growth of approximately 20 per cent at Rs 3.62 billion for the quarter June quarter compared with Rs 3.01 billion in the corresponding quarter last year.

The Total Income for the June quarter was also higher by approximately 41 per cent at Rs.11.59 billion as against Rs 8.23 billion for the corresponding quarter ended June 30, 2017.

Analysts are optimistic in the backdrop of an expected boom in subscription growth due to the digitisation of Tamil Nadu and advertisement revenue growth, especially with new channel launches factored in. Besides, the company's revenue from IPL also increased substantially.

Sun’s IPL revenue nearly tripled to Rs 3.8 billion YoY from Q1FY18’s Rs 1.4 billion based on the increase in BCCI’s pool as per Star’s IPL deal and the consequent increase in revenue share paid by BCCI to all franchisees. Franchise fee paid by Sun to BCCI moved to 20 per cent of revenue share from the Rs 850 million fixed fee in 1QFY18, according to IIFL research report.