Dear All,
A public limited company wants to pay remuneration to its executive director. Kindly advise on the limits applicable for such payment and the procedure to pay remuneration.. Please note that the company also pays remuneration to its managing director as per part b of schedule xiii..
The Company can pay Remuneration to the Executive Director of Co. (having a MD) to the extent of 1% of the Net Profit of the Company.
As per sec 309 of the Companies Act, If the Director is in full time employment he may be paid a remuneration upto 5% of net profit of the company but this limit should not exceed 10% to all the directors.
pl. refer to sec. 198,269. you may alos consider sch. XIII and find out under which category your co. fits in and accordingly decide his remuneration through remuneration comm.
You may also pass sp. res. and go to central govt. for salary in excess of above. C.G. will tak its decision on merits.
CAclubindia
