SEBI proposes easing executive pay disclosures for AMCs
New Delhi, June 10
Markets regulator SEBI on Wednesday proposed easing executive remuneration disclosure rules for asset management companies by replacing individual name‑wise pay disclosures with consolidated figures.
SEBI said the move would balance transparency with privacy and competitive concerns.
The market regulator considers the new rule that stipulates AMCs to report aggregate remuneration for senior roles - including CEOs, CIOs and COOs on their websites.
The total pay to the top 10 highest‑paid employees, and the total remuneration for staff above existing thresholds, will be reported instead of publishing individual salaries.
All employees earning at least Rs 1.02 crore annually or Rs 8.5 lakh per month if employed for part of the year will be covered as part of the disclosure.
AMFI made a representation to Sebi seeking disclosure of the remuneration policy of AMCs on their websites; streamlining of existing disclosure requirements into consolidated disclosures for key employees along with the number of such employees; a scheme-level, consolidated disclosure of remuneration of fund managers, to be provided only upon request of investors and limited to schemes in which such investors have invested.
"This would provide a holistic and structured view of senior management compensation, enabling unitholders to assess the overall quantum of remuneration at the senior management level, while aligning the level of disclosure with considerations of materiality and proportionality," SEBI said in its consultation paper.
AMFI informed SEBI that investment decisions are typically driven by factors such as scheme performance, risk management, asset allocation, investment strategy, and expense ratios.
Individual-level remuneration disclosures may not materially influence such decisions or improve investor outcomes.
Further, public disclosure of named individual remuneration may expose employees to risks relating to misuse of personal information.
The mutual fund industry competes for talent with other segments such as Portfolio Management Services (PMS) and Alternative Investment Funds (AIFs), where similar disclosure requirements are not applicable.
— IANS
Reader Comments
Good move SEBI! The PMS and AIF sectors don't have these disclosures, so why should AMCs be singled out? Investors care about returns and expense ratios, not individual salaries. Also, the privacy concern is valid - publishing names with salaries could lead to harassment or targeted fraud attempts. 👏
Wait, Rs 1.02 crore threshold? That's an incredibly high bar! In India's context, only the very top executives would be affected. Most mutual fund employees earn far less. This seems like a reasonable compromise - enough transparency for investors to see total compensation trends without micromanaging individual pay packets.
I'm skeptical. While privacy matters, investors have a right to know if a CEO is overpaid relative to fund performance. The aggregated figures might hide excessive compensation at the top. But I understand the talent competition argument - if PMS doesn't disclose salaries, AMCs would lose good people. SEBI should review this again after 2-3 years to see if it's working.
Practical move. As long as the consolidated data shows total compensation for senior management and the top 10 highest-paid, investors can still judge if the board is being responsible with shareholder money. Individual names aren't necessary for that. This also reduces the reporting burden on AMCs - cost savings that could benefit investors through lower expenses! 😊
Finally SEBI is listening to industry feedback. AMFI's suggestion to provide scheme-level data only upon request is sensible - investors who really care can ask, and others aren't overwhelmed with irrelevant data. The key point is that fund performance matters more than individual salaries. Let's focus on reducing expense ratios instead!