Executives in India's Rs 13 lakh crore mutual fund industry are upset with a recent rule asking fund houses to disclose salaries of executives earning more than Rs 60 lakh a year.
Fund houses did not anticipate such a move from the Securities and Exchange Board of India (Sebi). They said the decision was unwarranted and did not serve any purpose.
Business Standard spoke to more than a dozen chief executive officers (CEOs) of big, mid-sized and small fund houses. Most of them were unhappy with the regulator's decision.
The latest board meeting of the Association of Mutual Funds in India (Amfi) discussed the matter at length but fund houses failed to reach a consensus on how to approach Sebi on the issue.
Dhirendra Kumar, chief executive of fund tracking firm Value Research, said, "I have failed to understand what purpose will such disclosures serve."
A section of CEOs sees no problem in disclosing pay. Since they manage public money there is no harm if investors, distributors and other stakeholders know their pay packages, they feel.
"Companies and banks disclose their executives' salaries. We will be added to the list now," said the managing director of a mid-sized fund house. However, a larger section of executives are not in favour.
"There should not be any issues with disclosures, provided they are relevant. I would have preferred if Sebi had asked us to disclose how much fees we charge investors annually. Any further segregation in terms of employees' salary is unwarranted and unnecessary," said a CEO of a large fund house.
According to another executive, "There is no point in challenging Sebi's decision. However, what will such disclosures achieve other than making headlines?"
None of the executives wished to be named given the sensitivity of the matter.
Fund houses have one month to disclose executives' remuneration for year 2015-16. Sebi, in its circular, had stated that fund houses had to make disclosures pertaining to a financial year under a separate head, remuneration, on their websites within one month from the end of the financial year.