Former Spandana MD Padmaja Reddy questions high salary being paid to new MD and CEO

Padmaja Reddy, founder and erstwhile Managing Director of Spandana Sphoorty, has raised questions about the high salary being offered to the new MD and CEO Shalabh Saxena, arguing that it goes against the social objectives of microfinance companies.

“How can we achieve social objective when CEOs are given ₹6 crore?” Reddy asked during a recent conversation with BusinessLine, adding that loan officers who work at the ground level are paid a much lower salary.

“ Loan officers who work at the ground every day and night work with the social objective… we get our revenue from poor women,” she said, adding that microfinance companies cannot provide salaries as high as those given by banks.

BusinessLine has sent an e-mail query to Spandana on the issue and is awaiting a reply.

New appointment

Spandana Sphoorty had on November 22 announced the appointment of Saxena as its new MD and CEO and Ashish Damani as the President and Chief Financial Officer.

In a regulatory filing, Spandana had said that Saxena has been appointed for a period of five years. It, however, did not disclose his salary.

Also read: Spandana Sphoorty appoints Shalabh Saxena as new MD and CEO

According to Spandana’s annual report, Reddy had a fixed salary component of ₹3 crore, apart from a variable salary component based on the company’s profit.

Reddy had stepped down from Spandana, which is country’s second largest microfinance lender, following a disagreement over a proposal to sell the company to Axis Bank.