IRDAI has actually recommended modifications in pay norms of private insurance provider' chiefsNew Delhi: Insurance sector regulator Insurance Regulatory and Development Authority of India (IRDAI) on Monday proposed adjustments in the guidelines on compensation of non-executive directors, managing directors, CEOs and whole-time directors of personal insurer with a view to inspect extreme risk taking behaviour of leading executives.As per the proposed guidelines, the remuneration of president, managing directors and entire time directors will be divided in between set pay, perquisites and variable pay.Also, the set pay ought to be reasonable and all the fixed items, consisting of perquisites, ought to be treated as part of set pay, as per IRDAI's direct exposure draft.The regulative has sought discuss the exposure draft of 'Guidelines on Reimbursement of Non-Executive Directors and Handling Director, Chief Executive Officer, Whole-time Directors of Insurer' by January 19.
It even more proposed that the non-executive directors will be entitled to a remuneration of as much as Rs 20 lakhs per annum, in addition to sitting cost and other costs.
Apart from sitting fee and other expenditures, it provides for payment of reimbursement commensurate with a private director's duties and demands on time, which are considered adequate to draw in certified proficient individuals, in the type of fixed compensation.
Such reimbursement, however, will not go beyond Rs 20 lakh per annum for each such director leaving out Chairman, it said.Regarding chairman of the board, the proposed guidelines stated the remuneration might be chosen by the board of directors of the respective company.The non-executive director will not be qualified for staff member stock ownership strategies (ESOPs).
Prior approval of IRDAI will be needed for any allotment of sweat equity to a non-executive director.The compensation for the whole-time directors, president and handling directors will be divided in between set pay, perquisites and variable pay.
Repaired Pay need to be affordable and all the repaired products, including perquisites, shall be treated as part of set pay, said the draft guidelines.The standards likewise specify the standards for calculation of variable pay.