Compensations are moving northwards and how! Surprisingly, in a pandemic hit year, the take-home pay of Nithin and Nikhil Kamath, co-founders of discount brokerage firm Zerodha, has edged up to the ₹100 crore per annum mark making them the highest-paid promoters in India. Nithin’s wife, Seema Patil, who has been elevated from director to a whole-time director in the company will also get ₹100 crore.

According to documents filed by the company with the Ministry of Corporate Affairs, accessed by BusinessLine from research platform Tofler, Zerodha’s board approved the revised salaries on May 10. The board also approved using the surplus funds of up to ₹1,500 crore for mergers and acquisition.

Nithin will get every month a basic salary of ₹4.16 crore plus ₹2 crore as house rent allowance, ₹1.6 crore as ‘other perquisites’ and ₹41 lakh as ‘other allowances’. In addition, he will get a variable pay and a bonus, as decided by the board depending on the performance and policies of the company. Nikhil and Seema, too, get identical packages.

Top bracket

The Kamaths now join the elite league of high-earning start up founders like Vijay Shekhar Sharma (Paytm), Deepinder Goyal (Zomato), and Harsh Jain (Dream 11), who earn a salaries ranging between ₹3 crore and ₹6 crore per annum.

By comparison, top honchos of traditional firms have lower salaries. TCS’ Chief Executive Officer and Managing Director Rajesh Gopinathan took home about ₹20.36 crore in FY21, and Tata Sons chairman N Chandrasekaran drew a pay packet of ₹58 crore in FY20. Reliance Industries’ Mukesh Ambani took home ₹15 crore in FY20 and decided to forgo his entire compensation for fiscal 2021.

Zerodha has been wresting business from traditional brokers in the retail broking segment, and commands 19-20 per cent market share. In FY20, the company had registered a 15 per cent growth in revenue at ₹1,093.64 crore, and

made a profit of ₹442.3 crore. With a wealth of ₹24,000 crore, Nithin and Nikhil had topped the list of India’s self-made richest under 40, compiled by IIFL Wealth and Hurun India last year.

Rewarding years

When contacted Nithin told BusinessLine that the last two years years had been really good and profitable. “We are probably the largest bootstrapped start-up out there, generating profits with no external investors. Most founders today sell a small amount of their stakes to someone else to make money. And, because we're not looking at selling stakes in the business to anyone, we have to take it out as salaries or as dividends.” He also clarified, “ But the resolution is only a provision. It's not that we have taken that salary."

Nicolas Dumoulin, Managing Director, Michael Page India, said since Zerodha was not a listed company it was up to the founders to define remuneration for themselves.

"It's his own money, and they are not a listed company. Technically, it has to be approved by the board, and they must have held the majority of the shares, so in that sense, it is up to them how they want to define remuneration for themselves. On the other hand, if they want to go public, there needs to be a value they bring to the table otherwise the investors would question the governance rules. If they were to sell their stocks, they would get much more than that and no one would say anything about it," Dumoulin said.

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