Market regulator has sought the compensation structure of the key AMC personnel including fund managers operating from abroad for the last three years, confirmed two senior AMC officials.
The key personnel of AMCs are CEOs, CIOs, sales heads, compliance officers and chief operating officers.
AMFI is said to have circulated an informal advisory note to fund houses 10 days back which said that the compensation of top key personnel is being examined by SEBI and could perhaps lead to some ‘policy guideline from SEBI’, said an official who received this communication from AMFI.
“It is a very thorough data gathering exercise,” said the CEO of a bank sponsored fund house.
Industry experts say that if the compensation is regulated by SEBI and linked to size of the AMC AUMs, it will hurt the growth of smaller AMCs. “We will be starved for talent. If salaries are regulated then it will hurt the smaller players more,” said the CEO quoted above.
“You can’t tie the salary to the AUM size as the size keeps changing. In fact, smaller fund houses have to pay higher salaries to attract talent because people usually prefer to work with the top fund houses,” said the sales head of a bank sponsored fund house.
Fund officials feel that the compensation structure should be left to market forces. “It’s the prerogative of the promoter to decide the pay scale. It should be left to market forces. You have to be competitive in order to attract the right talent,” said the sales head of a foreign fund house.
Fund officials are of the view that the salary paid to the top management does not affect investors as the TER is regulated by SEBI.
Some officials say that SEBI is asking for such details because it is concerned over the profitability of fund houses.
Let us know your views.
