Paytm founder and CEO Vijay Shekhar Sharma’s remuneration has been found to be materially below the compensation benchmarks for comparable companies, prompting the board of parent One 97 Communications to recommend a revision to his pay structure. The proposal follows an independent benchmarking exercise commissioned by Paytm and comes as the company enters a new phase after reporting its first full year of profitability in FY26.
Sharma received total remuneration of ₹4.33 crore in FY26, including perquisites, down from ₹4.5 crore in FY25. His base compensation has not increased for four years, while he voluntarily gave up 2.10 crore employee stock options in 2025 and currently holds no ESOPs in the company. The proposed structure would introduce performance-linked variable pay but no fresh stock options, with shareholder approval required for the change.
Paytm Board Proposes New Compensation Structure
The Paytm board has proposed changing Sharma’s remuneration structure after an independent assessment found his existing compensation to be materially below comparable-company benchmarks.
The company’s Nomination and Remuneration Committee (NRC) and board had previously recommended adding a variable-pay component in July 2025. At the time, Sharma voluntarily requested that his remuneration remain unchanged.
The latest proposal marks a shift toward linking a portion of his compensation directly to company performance.
Vijay Shekhar Sharma Compensation Snapshot
| Metric | FY25 | FY26 | Proposed FY27 Structure |
|---|---|---|---|
| Total remuneration | ₹4.50 crore | ₹4.33 crore | Revised structure proposed |
| Base compensation increase | — | No increase for 4 years | To be reviewed |
| Variable pay | Not included in current structure | Not included | Performance-linked |
| ESOPs held | — | None | No fresh stock options |
| Performance metric | — | — | Target PAT growth |
| Approval required | — | — | Shareholder approval |
The proposed structure will apply from April 1, 2026, through December 18, 2027, covering the remaining period of Sharma’s current tenure as managing director and CEO.
Sharma’s ₹4.33 Crore Pay Remains Below Listed Peers
The benchmarking exercise found that Sharma’s compensation sits toward the lower end of the range among comparable listed founders and CEOs.
For comparison, Nykaa founder Falguni Nayar received around ₹11 crore in FY25 after a 28% increase in compensation. Meesho CEO Vidit Aatrey’s remuneration was around ₹5.42 crore during the same period.
That puts Sharma’s FY26 total compensation of ₹4.33 crore below both cited peer figures.
CEO Compensation Comparison
| Founder/CEO | Company | Reported Compensation | Period |
|---|---|---|---|
| Vijay Shekhar Sharma | Paytm | ₹4.33 crore | FY26 |
| Vidit Aatrey | Meesho | ₹5.42 crore | FY25 |
| Falguni Nayar | Nykaa | About ₹11 crore | FY25 |
The figures are from different financial years and should therefore be viewed as a directional peer comparison rather than a like-for-like compensation ranking.
No Base Pay Increase For Four Years
One of the factors highlighted in the compensation review is that Sharma’s base compensation has remained unchanged for four years.
His total remuneration also declined in FY26, falling to ₹4.33 crore from ₹4.5 crore in FY25.
This is notable because Paytm has undergone a significant business transition during the same period, including changes to its financial-services operations, regulatory challenges and a subsequent return to profitability.
The proposed compensation framework would therefore introduce greater flexibility by allowing Sharma’s total remuneration to rise based on measurable company performance rather than relying solely on fixed compensation.
Sharma’s Recent Compensation History
| Financial Year | Total Reported Compensation |
|---|---|
| FY25 | ₹4.50 crore |
| FY26 | ₹4.33 crore |
| Change | Down ₹0.17 crore |
| Percentage change | About -3.8% |
The FY26 figure includes perquisites, according to Paytm’s annual reports.
Performance-Linked Variable Pay Will Be Introduced
Under the proposed arrangement, Sharma would receive a variable component determined by the NRC based on achievement against predefined financial targets.
For FY27, the principal metric will be the percentage achievement of the company’s target profit-after-tax growth.
This creates a direct link between executive compensation and shareholder-facing financial performance.
Proposed Variable Pay Framework
| Component | Proposed Approach |
|---|---|
| Fixed compensation | Subject to revised structure |
| Variable compensation | Performance-linked |
| FY27 performance metric | Target PAT growth |
| Determining body | Nomination and Remuneration Committee |
| Fresh ESOPs | None proposed |
| Approval | Shareholders |
The approach differs from a compensation increase based solely on market comparisons because part of any additional remuneration would depend on Paytm meeting predefined financial objectives.
Sharma Gave Up 2.10 Crore ESOPs
The proposed pay revision also comes after Sharma voluntarily surrendered 2.10 crore ESOPs in 2025.
He currently holds no employee stock options in the company. The latest proposal does not include the issuance of fresh stock options.
This means the proposed revision is primarily focused on the cash-remuneration structure rather than providing Sharma with another equity-based incentive package.
The distinction is important for shareholders because ESOPs can potentially create substantial future compensation costs depending on the company’s share price and vesting conditions.
Paytm Conducted An Independent Global Benchmarking Exercise
Paytm appointed an independent, globally recognized third-party human-resource consulting firm in June 2026 to assess Sharma’s compensation.
The exercise considered three major components of executive compensation:
- Fixed remuneration
- Variable remuneration
- Employee stock options
The consultant also compared Sharma’s compensation against founders and CEOs at new-age internet companies represented in the Nifty Internet Index, as well as selected financial-services and technology companies in the BSE 100 and the broader BSE 100 group.
Scope Of The Benchmarking Exercise
| Benchmarking Area | Included |
|---|---|
| Fixed pay | Yes |
| Variable pay | Yes |
| ESOPs | Yes |
| New-age internet companies | Yes |
| Nifty Internet Index companies | Yes |
| Selected financial-services companies | Yes |
| Selected technology companies | Yes |
| BSE 100 companies | Yes |
The use of multiple peer groups is intended to provide a broader comparison than simply matching Sharma’s compensation with other fintech CEOs.
Paytm’s Profitability Strengthens The Case For A Performance-Based Structure
The proposed compensation revision comes after Paytm achieved its first full year of profitability in FY26.
The company reported profit after tax of ₹552 crore for FY26. Its profitability also continued into the first quarter of FY27, when PAT rose 79% year-on-year and 20% sequentially to ₹220 crore.
Paytm Profitability Snapshot
| Metric | FY26 / Q1 FY27 |
|---|---|
| FY26 PAT | ₹552 crore |
| Q1 FY27 PAT | ₹220 crore |
| Q1 FY27 YoY PAT growth | 79% |
| Q1 FY27 sequential PAT growth | 20% |
| FY26 status | First full year of profitability |
The improvement provides the backdrop for the proposed performance-linked compensation framework, with PAT growth becoming the key metric for variable pay in FY27.
Paytm’s Profitability Has Changed The Compensation Context
The proposed remuneration revision comes at a different point in Paytm’s corporate journey than earlier compensation decisions.
The company has moved from a period of significant regulatory and operational pressure to a phase in which management is emphasizing profitability and financial discipline.
By tying variable pay to PAT growth, the board is effectively connecting executive compensation to the company’s ability to sustain that improvement.
However, the structure also places greater emphasis on the quality and durability of earnings rather than simply revenue expansion or user growth.
Board Also Proposes Changes For Directors And ESOPs
The compensation review is not limited to Sharma.
Paytm’s board has also proposed changes to the remuneration framework for non-executive and independent directors based on an independent benchmarking exercise.
Separately, the company is proposing changes to its ESOP framework that would link future vesting more closely to performance.
Proposed Governance And Compensation Changes
| Area | Proposed Change |
|---|---|
| CEO compensation | Revised structure for Sharma |
| Variable pay | Linked to financial performance |
| CEO ESOPs | No fresh stock options proposed |
| Non-executive directors | Remuneration structure to be revised |
| Independent directors | Benchmark-based remuneration changes |
| Future ESOP vesting | Greater performance linkage |
This suggests Paytm is using the current review as a broader exercise to redesign executive and board compensation rather than treating Sharma’s remuneration as an isolated issue.
Why Executive Pay Is Becoming More Performance-Linked
Performance-linked compensation has become increasingly important for public companies, particularly businesses that have moved from rapid growth toward profitability.
For shareholders, a variable-pay structure can provide greater alignment between management compensation and business outcomes.
In Paytm’s case, the proposed use of PAT growth as the FY27 metric gives the board a relatively clear financial measure against which the variable component can be assessed.
At the same time, compensation structures need to balance short-term performance with longer-term business development. A single financial metric can provide clarity, but companies typically need broader governance mechanisms to ensure management does not prioritize short-term earnings at the expense of sustainable growth.
Shareholders Will Have The Final Say
The revised remuneration framework remains subject to shareholder approval.
The proposal covers the remaining period of Sharma’s current tenure as managing director and CEO, from April 1, 2026, to December 18, 2027.
This means shareholders will ultimately decide whether the proposed structure, including the performance-linked variable component, should be implemented.
Key Dates And Decisions
| Item | Detail |
|---|---|
| Independent benchmarking commissioned | June 2026 |
| Earlier variable-pay recommendation | July 2025 |
| Proposed framework start | April 1, 2026 |
| Proposed framework end | December 18, 2027 |
| Approval required | Shareholders |
| FY27 performance metric | Target PAT growth |
The AGM notice provides the formal basis for the proposed remuneration changes.
What The Paytm Pay Revision Means For Investors
For investors, the most important question is not simply whether Sharma’s compensation rises above ₹4 crore.
The more significant issue is how the new structure links executive pay to Paytm’s financial performance.
If PAT growth continues, Sharma’s variable compensation could increase in line with the company’s performance. If the company fails to meet predefined targets, the performance-linked component could be lower.
That structure potentially provides a clearer connection between management rewards and shareholder outcomes than a straightforward fixed-pay increase.
The Bigger Picture
Vijay Shekhar Sharma’s proposed compensation revision reflects a broader shift in Paytm’s corporate governance as the company moves into a profitability-focused phase. His FY26 remuneration of ₹4.33 crore was below the cited compensation levels of comparable new-age company leaders, including Meesho’s Vidit Aatrey at about ₹5.42 crore and Nykaa’s Falguni Nayar at around ₹11 crore in FY25.
The proposed framework also changes the nature of Sharma’s compensation rather than simply increasing his fixed salary. A variable component linked to FY27 PAT growth would make part of his remuneration dependent on financial performance, while no new ESOPs are proposed. This comes after Sharma voluntarily gave up 2.10 crore ESOPs in 2025 and as Paytm reports stronger profitability, including ₹552 crore PAT in FY26 and ₹220 crore in Q1 FY27.
Looking Ahead
The immediate next step is shareholder consideration of the proposed remuneration framework. If approved, Sharma’s compensation will gain a performance-linked component for the remaining period of his current tenure through December 18, 2027. The outcome will also provide a clearer test of how Paytm’s shareholders view the balance between executive compensation, peer benchmarking and financial performance.
For Paytm, the broader challenge will be sustaining the profitability that has enabled the board to propose the new structure. With PAT growth serving as the key FY27 performance metric, Sharma’s eventual variable compensation will increasingly depend on whether the company can maintain its earnings momentum. The board’s parallel changes to director remuneration and ESOP vesting also suggest that Paytm is moving toward a more performance-oriented compensation framework across its leadership structure.
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