No govt approval required for public cos for managerial compensation

No govt approval required for public cos for managerial compensation:Approval of Central Government shall no longer be required for payment of remuneration to the managerial personnel in excess of 11 per cent of the net profit of a company

No govt approval required for public cos for managerial compensation

In pursuance of its policy of Minimum Government-Maximum Governance and providing Ease of Doing Business to the law-abiding Corporates of this country, the Ministry of Corporate Affairs (MCA) has notified commencement of important Amendments to the Companies Act. Now with effect from 12th September, 2018, approval of the Central Government shall no longer be required for increase in the payment of remuneration to the managerial personnel (in excess of 11 per cent of the net profit of a company). In a move designed to empower common shareholders of a company, the Government has notified that remuneration in excess of individual limits laid down for Executive and non-Executive Directors shall henceforth be approved by the shareholders through a Special Resolution. Where a company has defaulted in payment of dues to any Bank/Financial Institution or Non-convertible Debenture holder or any other Secured Creditor, their prior approval shall be required before placing the matter for consideration & approval in General Meeting of shareholders. [caption id="attachment_33793" align="aligncenter" width="566"] No govt approval required for public cos for managerial compensation says MCA[/caption] MCA notifies provisions of sections 66 to 70 of Companies Amendment Act 2017 With issue of the Notification,all pending applications submitted to MCA for approval of proposals for payment of managerial remuneration in excess of limits laid down, would automatically abate & companies are free to obtain requisite approvals from shareholders within one year. MR-2 e-Form, which was hitherto being filed by Companies for both appointment and remuneration of Managerial Personnel, would henceforth have to be filed only for appointment of Managerial Personnel as per the Revised Schedule-V. With the issue of this Notification, five Amendments brought forth to the Companies Act 2013, in the Companies (Amendment) Act, 2017, covering Amendments to Sections 196, 197, 198, 200 and 201 of the Companies Act, 2013, stand effected.