Fundamental Glossary / Management & Corporate Governance
Promoter Remuneration
Pay, commission, and perquisites taken by promoter directors from the company.
Formula
Disclosed in the annual report as managerial remuneration. Company law caps it relative to profit, with shareholder approval and, in some cases, government or lender conditions when profit is thin.
What it means
Promoters who also manage the company are paid for that job. The question is whether the pay matches the role and the profit, or whether it is a private dividend.
Commission as a percentage of profit grows automatically when profit grows. A fixed multiple of peer-CEO pay, on top of a controlling stake, is a different and richer arrangement.
How to read it
Set the remuneration next to PAT and next to dividends paid to all shareholders. If pay is large and the dividend is token, the cash is leaving through salary.
What to watch
Perquisites, guarantees, and related-party contracts can be pay by another name. Read the managerial-remuneration note and the related-party note together.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.