SEBI proposes pooled pay disclosure for AMC employees, Pg21

Key Highlights:

• The Securities and Exchange Board of India (SEBI) has proposed changing remuneration disclosure norms for Asset Management Companies (AMCs).
• The new proposal suggests pooled disclosure of aggregate remuneration and the total number of employees, replacing individual salary disclosures.
• This move aims to align disclosure with materiality and proportionality while addressing industry concerns like privacy and talent retention.
• Experts, however, believe it could reduce transparency regarding the compensation of 'star fund managers'.
• Currently, AMCs disclose the names and remuneration of their top ten employees and those earning above ₹1.02 crore annually.

Detailed Insights:

• SEBI issued a consultation paper on June 10, 2026, to review the existing executive remuneration disclosure framework for AMCs.
• The current framework requires AMCs to disclose individual remuneration for key executives like CEO, CIO, COO, and employees exceeding certain salary thresholds.
• The proposed change would mean investors might lose visibility into whether a small group of 'star fund managers' receive disproportionately large compensation packages.
• SEBI stated that the new framework would offer a holistic view of senior management compensation, enabling unitholders to assess overall remuneration.
• The proposal also suggests that scheme-level consolidated disclosure of fund manager remuneration could be provided upon specific request by unitholders for schemes they have invested in.
• Industry participants, including the Association of Mutual Funds in India (AMFI), raised concerns about the scope, granularity, and relevance of the existing disclosure framework, citing privacy and data protection issues.
• Listed AMCs are already subject to detailed remuneration disclosure requirements under SEBI (Listing Obligations and Disclosure Requirements) Regulations and the Companies Act, 2013.

Key Concepts Involved:

• Securities and Exchange Board of India (SEBI): The primary regulator for the securities market in India, established to protect investor interests and promote market development.
• Asset Management Companies (AMCs): Financial institutions that pool funds from multiple investors and invest them in various financial instruments to generate returns for a fee.
• Mutual Funds: Investment vehicles that pool money from multiple investors to invest in a diversified portfolio of securities like stocks, bonds, and money market instruments, managed by professional fund managers.
• Remuneration Disclosure: The statutory and regulatory requirement for companies to publicly report the compensation paid to key managerial personnel, directors, and senior executives to ensure transparency and corporate governance.