Zerodha's Nithin Kamath Clarifies On Rs 100-Cr Salary, 'Reported Figures Are Misinterpreted'
Nithin Kamath said, " We are a private company & no obligations to clarify, but we thought maybe we should, as there are folks who are misinterpreting this"
New Delhi: Zerodha founder and CEO Nithin Kamath and his wife Seema Patil have been grabbing headlines for the past few days over the salaries they will be getting this financial year. People were startled to know that the couple will be earning up to Rs 100 crore each every year according to a special resolution passed by the stock brokerage firm’s board.
However, after drawing much attention of the social media users, Nithin Kamath took to Twitter and clarified that the board's decision does not necessarily mean that the founders would draw out Rs 100 crore as final salaries from the company.
In a series of tweets, Nithin Kamath explained that the company has only passed the resolution for allowing the three to draw a salary that may equal Rs 100 crore each every year, but in reality, the actual salary drawn would not be the same. “It is important to take liquidity out when you are ‘up’ to de-risk. We have always done this, ~15% of profits,” The Zerodha CEO said.
Nithin said that Zerodha is a private company and he is under no obligation to clarify, "but we thought maybe we should, as there are folks who are misinterpreting this," he added.
Although the actual salary might be lower than the approved Rs 100 crore, it will still be higher than the norm, according to Nithin Kamath.
The online brokerage firm also aims to roll out a buyback plan for its employees worth ₹200 crore.
"Broking is riskier because most revenue comes from active traders with leveraged positions that carry risk, one black swan event can cause the business large losses. Also due to changing regulations, any of which can potentially impact profitability significantly," Nithin said.
After their ESOP buyback last year that valued the company at $1 billion, Zerodha earlier last week announced another ESOP buyback worth Rs 200 crore which would value the company at $2 billion.
What does Zerodha do?
Zerodha Broking Limited is an Indian financial services company, that offers retail and institutional broking, currencies and commodities trading, mutual funds, and bonds. Founded in 2010, the company is headquartered in Bangalore and has a physical presence in several major Indian cities.
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