Stock broker Zerodha has been doing well for themselves despite COVID-19. Thus, the director and founders were expected to receive around Rs 100 crore as salary stated a news report. After the news report, its founders and director received backlash on Twitter for the salaries they drew.
Despite not being a listed company, Nithin Kamath, co-founder of Zerodha, explained the reason for the pay.
Kamath added that he is surprised that there is an unwanted noise around the salary Nikhil Kamath (co-founder), Seema Patil (whole-time director and Nithin’s wife) and he draws.
He added that the headline of the new report is misleading. “We are a private company and have no obligations to clarify, but we thought maybe we should, as there are folks who are misinterpreting this,” he added.
He explained the sum of Rs 100 crore is not true. He tweeted, “Firstly the reported figure isn’t the actual salary being drawn. This is an enabling resolution that allows us as working promoters to draw salaries up to the number in case of liquidity requirements.”
On May 28, Nithin Kamath tweeted the company was aiming for buyback shares from early employees at a valuation of USD 2 billion. It plans to buy back employee stock option plans (ESOP) worth about $25 million (Rs 150-200 crore) in July-August this year.
Explaining that decision in recent tweet, he said de-risking is something that they are enabling for everyone on their team through their ESOP buyback. “A portion of the profits allocated for the buyback every year. This year it is around Rs 200 crore. “Our PAT for FY 20/21 approximately Rs 1000 crores (similar to bank brokers).”
He explained his pointed on de-risking with a series of tweets.
He added that he believes that building sustainable businesses and paying taxes is a great step in contributing to society and the nation. He stressed, “...we are among the highest tax-paying new-age businesses."
After he issued this explanation, he was faced with many options: one who tried to reason with him; others who felt he was drawing high pay; and there were other sets of people who found this unfortunate for a wealth creator to explain his pay.
Bangalore-based fintech unicorn Zerodha was started in 2010 by brothers Nithin and Nikhil Kamath and grew from a startup to India's largest brokerage.
