Appointment and remuneration of managerial personnel

Every Sensex company has a face: a Chairman who talks to the press, a CEO who runs the office, a CFO who signs the numbers and a company secretary who makes sure the paperwork is right. Some of them are on the Board and some are not, and their pay packets make headlines every year. The Companies Act decides who must be appointed, how long they can be appointed for, who approves, and how much of the company's profit they can take home. This topic covers those appointments and the pay limits.

In two minutes

Key managerial personnel (CEO or managing director or manager, company secretary, whole-time director, CFO) must be appointed by Board resolution (s.203); managing directors, whole-time directors and managers have a maximum term of five years and age limits (s.196); and total managerial pay in a public company is capped at eleven per cent of net profits unless the Act's exceptions apply (s.197).

The rest of this chapter

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