Paytm to cut remuneration of its board members, cap annual pay at Rs 48L

Currently, the annual salaries of non-executive independent directors of Paytm's board members runs into crores

Ahead of its annual general meeting, scheduled on September 12, Paytm has proposed to cut remuneration for its board members. The fintech giant is also planning to cap the annual compensation of its board members at Rs 48 lakh with a fixed component of Rs 20 lakh. The new proposed remuneration framework will be subject to shareholder approval, according to a report by The Financial Express.

Currently, the annual salaries of non-executive independent directors of Paytm’s board members run into crores. With the revised structure, the annual compensation of each non-executive independent director will be capped at Rs 48 lakh, with a fixed component of Rs 20 lakh. The variable component will be linked to attendance at the meetings and chairpersonship/ membership positions held in the various committee(s) of the board, to ensure good governance.

The new remuneration structure is based on the benchmarking done by the company, according to Paytm’s exchange filing.

On the path to sustainable business model: Vijay Shekhar Sharma
 

Meanwhile, in a message to shareholders, Vijay Shekhar Sharma, founder and CEO, said the company is now refocused on the path to deliver a long-term, sustainable and profitable business model.

“There are times when actions speak louder than words and results speak louder than plans. After resolving many of the challenges that we faced, we are now refocused on our path to deliver a long-term, sustainable and profitable business model... In the last quarter, we encountered regulatory action on our associate entity Paytm Payments Bank Limited, which presented significant challenges and provided us with many valuable lessons,” he said.

Sharma further said that the focus on financial inclusion and digitising the informal economy will bring long-term benefits to both the company and the country. He added that Paytm will not only leverage AI-led cost savings but also build AI-first products that can help small merchants and micro-businesses.

At present, the company is seeking shareholder approval on reappointment of Ravi Chandra Adusumalli, founder and co-managing partner of Elevation Capital to its board of directors, who is set to retire by rotation. Elevation Capital was one of the initial backers of Paytm.

RBI’s crackdown on Paytm Payments Bank
 

The Reserve Bank of India had earlier barred Paytm Payments Bank from onboarding of new customers in January this year. Months after the crackdown, founder Vijay Shekhar Sharma has said that the company is striving to become a consistently free cash-generating entity. “For me personally, this year has been centered on our core business, instilling a compliance-first approach in every team member, and striving to become a consistently free cash-generating company,” said Sharma.