When do you start to doubt the promoters, especially in a family owned business, where each person is holding a position and withdrawing salary from the company. Is there a threshold you keep?
I am not sure about the answer to that question. But I am interested in knowing the ideal ratio between the top management’s pay and the worker’s pay.
At one point Infy, when Murthy was the CEO, had the lowest ratio.
How much would you pay a manager for your own business? See a stock a business you own.
Slightly relevant question. The remuneration of directors of a public company (combined) should not exceed 10% of net profit. But I came across DCM Sugar’s AR and found the 3 directors pay to be 5 Crores each or 15 Cr+ combined. The net profit from consolidated P&L statement is 122 Crores. Are there any exceptions to this company act of ceiling limit (10% of net profit)?
Refer Page 36 of DCM 2017 AR
I want to know ideal value or rough value of:
Ratio of the remuneration paid to Directors compared to median employee’s.
Is 40 or 50 times good one? or is very high?
Other rules about remuneration is well written here.
I just asked about director’s remuneration compared to avg salary of employees.