Online brokerage firm Zerodha has allowed its founders- brothers Nithin & Nikhil Kamath and Nithin’s wife Seema Patil to each get a salary of Rs100 crore a year. A resolution for the same was passed at a recently held EGM of the company. If they do take the complete salary, they will be among the highest-paid founders of an Indian company. Among listed companies in the country, Sun TV’s Kalanithi Maran gets paid the highest at Rs87.5 crore.
According to Nithin Kamath, however, an enabling resolution has been passed which means that the founders will not necessarily take the entire money allocated. Increasing the salary is one of the ways, among others like dividends and buyback, to increase liquidity for the founders.
It is worth noting that the Companies Act puts a limit on salaries given in public companies. However, according to Saurabh Agarwal, Director at Kenis, Section 197 of the Companies Act allows a higher salary to be paid provided it is approved by the members at the general meeting.
Founded in 2010 in Bangalore, Zerodha is currently India’s biggest stockbroker with over 5 million retail users. The company received a boost during the pandemic when it more than doubled its number of users. One of the secrets to Zerodha’s success is its low brokerage charges on almost all kinds of trades.
According to Nithin, Zerodha sets aside 5 to 10 per cent of its yearly profit to support important causes. “We’ve committed $100 mil to grass-root organizations & startups working on climate change & creating green jobs. Climate change is an existential threat to our planet & our future generations,” he said recently through a tweet.
We're also giving back through @RainmatterOrg. We’ve committed $100 mil to grass-root organizations & startups working on climate change & creating green jobs. Climate change is an existential threat to our planet & our future generations.https://t.co/eekrJyKOGF 9/11
— Nithin Kamath (@Nithin0dha) May 28, 2021