Director’s pay capped at 11% of annual profit of public companies
Q. Director’s pay in public companies has been capped at what percent of net profit under the Companies Act?- Published on 16 Dec 15a. 10
b. 11
c. 12
d. 13
ANSWER: 11
Overall remuneration that directors of public companies can receive has been fixed at 11% of its annual profit recorded in a particular financial year. Under the Companies Act, Corporate Affairs Minister Arun Jaitley has announced that total remuneration payable to directors shall not exceed 11 percent of the net profits of that company for that financial year. Firms that will be considered public companies would be those with minimum paid up capital of INR 5 lakh or more. When there are losses or inadequate profits, remuneration may be paid as per the limits perceived and conditions specified in the Act.
