03 October 2024
One 97 Communications (OCL), the company behind the digital payments platform Paytm, experienced a 21% increase in its overall employee costs, which rose to Rs 4,589 crore in 2023-24 from Rs 3,788 crore in FY23. This increase occurred amidst regulatory scrutiny of its associated entity, Paytm Payments Bank, and a slowdown in its overall business.
OCL raised the remuneration of its executive director and group chief financial officer, Madhur Deora, by 15%, nearly double the median hike of the entire organization, according to its FY24 annual report. This hike was approved by a board resolution undertaken by the company in September 2023, and the revised salary was approved until the financial year 2026. In response to ET's queries, a Paytm spokesperson stated, "For eligible employees, the average percentage increase in remuneration in FY 24 is 14%, and the median increase in remuneration is [insert median increase]."
This hike brought Deora's remuneration to Rs 3.6 crore in 2023-24, while his overall remuneration without employee stock options (Esops) stood at Rs 4.2 crore. Vijay Shekhar Sharma, founder and chief executive of OCL, did not receive a hike last fiscal year, maintaining his overall remuneration at Rs 4.4 crore. The company mentioned that Sharma's salary had been fixed for three years in FY 2022.
Deora's salary hike, in addition to a 9% increase in his remuneration in FY 23, occurred during a year when the company initiated a mission to control its inflated employee costs. According to reports, Paytm had let go of more than 1,000 employees. The company aims to reduce its overall employee expenses by Rs 400-500 crore in the current fiscal year. Commenting on the increase in employee costs, a company spokesperson stated that Paytm strengthened its merchant sales and financial services teams to drive the penetration of high-margin use cases such as merchant subscriptions and loan distribution.
Since the beginning of the current financial year, a significant number of senior executives have left OCL due to regulatory actions on the banking business and organizational churn. Paytm's chief business officers Bipin Kaul and Ajay Gupta resigned, following the exit of Bhavesh Gupta, chief operating officer of the company. Surinder Chawla, chief executive of Paytm Payments Bank, resigned in April.
On August 21, Paytm adopted a resolution that its non-executive directors on the board will not be paid a remuneration higher than Rs 48 lakh per annum, with the fixed component being Rs 20 lakh. The company's share price dropped from around Rs 600 in March 2023 to around Rs 400 in March 2024 and has since appreciated to Rs 731.
To revitalize its business, Paytm is focusing on QR code payments through the sound box. It recently launched the tap and pay functionality on its sound boxes, typically used by small merchants to accept UPI payments via QR codes. On August 28, the company reported to the stock exchanges that it has received clearance for foreign direct investment into its subsidiary entity, Paytm Payment Services, and will be reapplying for the payment aggregator license to the Reserve Bank of India.
In the June quarter of the current financial year, Paytm reported operational revenue of Rs 1,501 crore and a net loss of Rs 840 crore. Deora, who previously worked as a senior executive at Citibank, has been with Paytm since 2016, leading the finance functions, and was promoted to the group CFO position in October 2020.
One 97 Communications (OCL), the company behind the digital payments platform Paytm, experienced a 21% increase in its overall employee costs, which rose to Rs 4,589 crore in 2023-24 from Rs 3,788 crore in FY23. This increase occurred amidst regulatory scrutiny of its associated entity, Paytm Payments Bank, and a slowdown in its overall business.
OCL raised the remuneration of its executive director and group chief financial officer, Madhur Deora, by 15%, nearly double the median hike of the entire organization, according to its FY24 annual report. This hike was approved by a board resolution undertaken by the company in September 2023, and the revised salary was approved until the financial year 2026. In response to ET's queries, a Paytm spokesperson stated, "For eligible employees, the average percentage increase in remuneration in FY 24 is 14%, and the median increase in remuneration is [insert median increase]."
This hike brought Deora's remuneration to Rs 3.6 crore in 2023-24, while his overall remuneration without employee stock options (Esops) stood at Rs 4.2 crore. Vijay Shekhar Sharma, founder and chief executive of OCL, did not receive a hike last fiscal year, maintaining his overall remuneration at Rs 4.4 crore. The company mentioned that Sharma's salary had been fixed for three years in FY 2022.
Deora's salary hike, in addition to a 9% increase in his remuneration in FY 23, occurred during a year when the company initiated a mission to control its inflated employee costs. According to reports, Paytm had let go of more than 1,000 employees. The company aims to reduce its overall employee expenses by Rs 400-500 crore in the current fiscal year. Commenting on the increase in employee costs, a company spokesperson stated that Paytm strengthened its merchant sales and financial services teams to drive the penetration of high-margin use cases such as merchant subscriptions and loan distribution.
Since the beginning of the current financial year, a significant number of senior executives have left OCL due to regulatory actions on the banking business and organizational churn. Paytm's chief business officers Bipin Kaul and Ajay Gupta resigned, following the exit of Bhavesh Gupta, chief operating officer of the company. Surinder Chawla, chief executive of Paytm Payments Bank, resigned in April.
On August 21, Paytm adopted a resolution that its non-executive directors on the board will not be paid a remuneration higher than Rs 48 lakh per annum, with the fixed component being Rs 20 lakh. The company's share price dropped from around Rs 600 in March 2023 to around Rs 400 in March 2024 and has since appreciated to Rs 731.
To revitalize its business, Paytm is focusing on QR code payments through the sound box. It recently launched the tap and pay functionality on its sound boxes, typically used by small merchants to accept UPI payments via QR codes. On August 28, the company reported to the stock exchanges that it has received clearance for foreign direct investment into its subsidiary entity, Paytm Payment Services, and will be reapplying for the payment aggregator license to the Reserve Bank of India.
In the June quarter of the current financial year, Paytm reported operational revenue of Rs 1,501 crore and a net loss of Rs 840 crore. Deora, who previously worked as a senior executive at Citibank, has been with Paytm since 2016, leading the finance functions, and was promoted to the group CFO position in October 2020.
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