Remuneration to independent directors
This query is : Resolved
16 March 2011
Hello,
We have appointed 3 non executive independent directors in an closely held public co. in order to fulfill the conditions of Sch XIII.
I want to know how can we remunerate independent directors and is there any restriction on their remuneration.
thnx
Hello,
We have appointed 3 non executive independent directors in an closely held public co. in order to fulfill the conditions of Sch XIII.
I want to know how can we remunerate independent directors and is there any restriction on their remuneration.
thnx
16 March 2011
Only Non - Executive Directors are treated as Independent Directors.
As per the provisions of section 309 of the Companies Act, 1956, a Director who is neither Managing Director nor is in the whole time employment of the Company may be paid remuneration:
a. by way of montly, quarterly or annual payment witht the approval of the Central Government, or
b. by way of fixed commission on the net profits of the Company with the approval of the shareholders by way of a special resolution.
The Commission payable to NED shall not xceed:
a. 1% of the net profits of the Company if the Company has a MD, WTD or a Manager, and
b. 3% of the net profits of the Company if the Company does not have a MD, WTD or a Manager.
As per the provisions of section 309 of the Companies Act, 1956, a Director who is neither Managing Director nor is in the whole time employment of the Company may be paid remuneration:
a. by way of montly, quarterly or annual payment witht the approval of the Central Government, or
b. by way of fixed commission on the net profits of the Company with the approval of the shareholders by way of a special resolution.
The Commission payable to NED shall not xceed:
a. 1% of the net profits of the Company if the Company has a MD, WTD or a Manager, and
b. 3% of the net profits of the Company if the Company does not have a MD, WTD or a Manager.
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