Money & Banking

Former Spandana MD Padmaja Reddy questions high salary being paid to new MD and CEO

Surabhi Mumbai | Updated on November 23, 2021

Padmaja Reddy   -  PAUL NORONHA

Says the move goes against the social objectives of microfinance companies

Padmaja Reddy, the founder and erstwhile Managing Director of Spandana Sphoorty, has raised questions about the high salary being offered to the new MD and CEO Shalabh Saxena, arguing that it goes against the social objectives of microfinance companies. 

“How can we achieve social objective when CEOs are given Rs 6 crore?” Reddy asked in a recent conversation with BusinessLine, noting that loan officers who work at the ground level are paid a much lower salary. 

“It cannot be the loan officers who work at the ground every day and night that they will work with the social objective… we get our revenue from poor women,” she said, adding that microfinance companies cannot provide salaries as high as those given by banks. 

Spandana Sphoorty did not respond to an email query by BusinessLine on the issue. 

New appointment

The company had on November 22 announced the appointment of Saxena as its new MD and CEO and Ashish Damani as the President and Chief Financial Officer.  

Also read: Spandana Sphoorty appoints Shalabh Saxena as new MD and CEO

In a regulatory filing, Spandana had said that Saxena has been appointed for five years. It, however, did not disclose his salary. 

According to Spandana’s annual report, Reddy had a fixed salary component of Rs 3 crore, apart from a variable salary component based on the company’s profit. 

Reddy had stepped down from Spandana, which is country’s second-largest microfinance lender, following a disagreement over a proposal to sell the company to Axis Bank.

Published on November 23, 2021

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