Startup Originals Team
Paytm is looking to revise the annual remuneration of founder and CEO Vijay Shekhar Sharma after the fintech company reported a major improvement in its financial performance and recorded a ₹220 crore profit.
The board of parent company One 97 Communications has proposed changes to Sharma’s compensation structure, according to the notice for the company’s 26th Annual General Meeting.
The proposal follows an independent benchmarking exercise commissioned by Paytm, which concluded that Sharma’s remuneration is materially lower than compensation paid to founders and CEOs at comparable new-age internet, financial services and technology companies.
What Happened?
Sharma received total remuneration of ₹4.33 crore in FY26, including perquisites. This was lower than the ₹4.5 crore he received in the previous financial year.
His base salary has remained unchanged since August 19, 2022. The proposed revision would introduce a variable component into his compensation, with the amount determined by the Nomination and Remuneration Committee against predefined financial targets.
For FY27, the proposed performance measure is linked to the percentage achievement of profit after tax growth.
The revised structure will require shareholder approval before it can take effect.
How Paytm Plans to Change CEO Compensation
The biggest change in the proposed remuneration structure is the introduction of performance-linked variable pay.
Instead of relying entirely on a fixed salary, the new component would connect part of Sharma’s compensation to Paytm’s financial performance.
For FY27, profit after tax growth will be used as the key financial target for determining the variable component.
The proposal does not include any fresh employee stock options for Sharma.
This is particularly relevant because Sharma is currently prohibited from accepting fresh ESOPs from listed companies under a settlement with the Securities and Exchange Board of India concluded in May 2025.
Under that settlement, Sharma accepted a three-year restriction on receiving fresh employee stock options from any listed company and paid ₹1.11 crore. One 97 Communications paid the same amount. The restriction is expected to remain in place until around May 2028.
How Vijay Shekhar Sharma’s Pay Compares With Peers
The benchmarking exercise compared Sharma’s compensation with founders and CEOs of new-age internet, financial services and technology companies, including companies in the BSE 100 and the broader BSE 100 leadership group.
The comparison indicated that Sharma’s compensation remains toward the lower end among several comparable founder-led companies.
For example, Falguni Nayar of Nykaa received around ₹11 crore in FY25, while Vidit Aatrey of Meesho received approximately ₹5.42 crore during the same financial year.
Against these figures, Sharma’s ₹4.33 crore remuneration in FY26 was comparatively lower.
His remuneration has also declined from the previous year rather than increased.
Sharma Previously Declined a Pay Increase
The proposed revision also comes after Sharma previously chose not to increase his compensation.
In July 2025, Paytm’s Nomination and Remuneration Committee and board had recommended adding a variable component to his remuneration.
However, Sharma voluntarily requested that his compensation remain unchanged, according to the AGM notice.
He has not received an increase in his base compensation for four years.
The latest proposal therefore represents a change in the approach, with the board now seeking to introduce a variable component linked to measurable financial performance.
Paytm’s Return to Profitability
The proposed change in CEO compensation comes at an important stage in Paytm’s business journey.
The company has moved from a period of significant regulatory and operational challenges to a stronger financial position.
Paytm reported its first full year of profitability in FY26, with profit after tax reaching around ₹220 crore. Its revenue also increased by approximately 22% to ₹8,437 crore during the year.
The improvement in profitability provides the backdrop for the proposed performance-linked compensation structure.
By tying variable pay to profit growth, the company is effectively connecting the CEO’s potential additional compensation with the financial performance of the business.
Why the New Pay Structure Matters
The proposed compensation structure could be important for Paytm because it creates a more direct link between executive remuneration and shareholder outcomes.
A fixed salary does not automatically change with a company’s financial performance. A variable component, however, can reward management when predefined financial targets are achieved.
For Paytm, the focus on profit after tax growth reflects the company’s transition toward profitability and financial discipline.
It also gives shareholders a clear metric against which the performance-linked component can be evaluated.
Company Background
Paytm, operated by One 97 Communications, was founded by Vijay Shekhar Sharma and has grown into one of India’s best-known digital financial services platforms.
The company operates across payments, financial services and digital commerce, with its ecosystem serving consumers, merchants and businesses.
Its business has undergone significant changes following regulatory action involving its payments banking operations. Paytm subsequently focused on strengthening its core payments business while expanding its financial services partnerships and improving operating efficiency.
The return to annual profitability represents an important milestone in this transformation.
What the Proposal Means for Paytm
The proposed compensation revision comes at a time when Paytm is attempting to establish a more sustainable business model.
The company has been working to improve profitability while maintaining growth across its payments and financial services operations.
A performance-linked CEO compensation structure could provide a clearer connection between leadership incentives and financial outcomes.
However, because the proposed changes require shareholder approval, the final compensation structure will depend on the outcome of the company’s AGM process.
Future Outlook
Paytm’s immediate focus is likely to remain on sustaining profitability, growing its core payments business and expanding financial services while maintaining tighter cost and operational discipline.
For Sharma, the proposed remuneration structure would introduce a stronger performance element into his compensation if approved.
The key measure for FY27 will be profit after tax growth, making the company’s ability to maintain and improve profitability particularly important for the proposed variable component.
Conclusion
Paytm’s proposal to revise Vijay Shekhar Sharma’s compensation marks a significant change after four years without an increase in his base pay.
His ₹4.33 crore remuneration in FY26 was lower than the previous year’s ₹4.5 crore and remained below compensation received by several comparable startup founders and CEOs.
The proposed structure would introduce variable pay linked to profit after tax growth, while excluding fresh stock options because of Sharma’s existing restrictions.
Coming after Paytm’s ₹220 crore FY26 profit, the proposal reflects the company’s transition from a period of financial and regulatory pressure toward a more profitability-focused phase. If approved by shareholders, Sharma’s future compensation will have a stronger direct connection with Paytm’s financial performance.
