Cap independent directors' pay for services at 10%, says expert committee Noor Arora
So far as overall remuneration of an independent director by a company is concerned, it is recommended that it be capped at 20 per cent of his gross annual income. . Shardul Shroff, the executive chairman of Shardul Amarchand Mangaldas who was a part of the committee, told Business Standard said the above two caps would ensure independence of the independent directors. . For other income for professional or any services to a company or its subsidiaries or associates or promoters, etc, other than board-related services, the same is limited to 10 per cent of the total income, he said. . These directors are paid in two ways — through sitting fee and commission. While the sitting fee is not a concern, it is commission, which raises eyebrows. The commission could range from 1-3 per cent of a company’s net profit, depending on whether the company has a managing director or a whole time director.
ARTICLE SOURCE: BS