Why are startup CEOs getting big jumps in their salaries just before IPO?
The number of startups in India continues to swell with each passing day. And so do that of the unicorns. Till May this year, India had 100 unicorns with a total valuation of $332.7 billion. On Sunday, Prime Minister Narendra Modi said that Indian startup unicorns’ average annual growth rate was higher than in the United States, the UK and other countries. Modi said that the startups continue to create value despite the pandemic-led slowdown. Meanwhile on Thursday, Union Minister Jitendra Singh said startups will determine India’s economy and that of the world too. Last week, logistics player Delhivery became the twelfth start-up to list on the bourses since 2019. Even as foreign investors are tightening their purse strings and asking the startups to brace up for tough days ahead, a Business Standard analysis found that their key management made a killing as they took the start-ups towards IPO filings. Of the 12 start-ups analysed by Business Standard, employee benefits — which includes salaries, bonuses, wages and gratuity– increased 21.4 per cent in the year of filing of the red-herring prospectus. The year before, the average increase in employee benefits was just 8.8 per cent. However, the key management personnel and their relatives earned considerably more. The average remuneration for KMPs jumped 114.9 per cent in the year of RHP filing — up from 70.3 per cent a year earlier. The remuneration, in this case, does not include data on rents and other benefits accrued to the top management during this period.
However, it does include short-term and long-term benefits and ESOP expenses.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
