In a twist in the corporate financial narratives of the Indian e-commerce sector, the co-founder and CEO of FirstCry, Supam Maheshwari, has witnessed a significant reduction in his monthly remuneration. Recent filings reveal that Maheshwari’s compensation plummeted by almost half to Rs 8.6 crore. This striking development comes as the company prepares for public listing, having re-submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) with an aim to generate Rs 1,816 crore through a fresh issue of shares.
In the fiscal year leading up to the first three quarters of FY24, Maheshwari’s monthly earnings had been a substantial Rs 16.7 crore. However, the newly adjusted figures indicate a 49 percent decrease compared to the previous fiscal year (FY23). As the company ushers in a new chapter with their upcoming Initial Public Offer (IPO), the cutback in the CEO’s salary emerges as a notable move, likely reflecting wider strategic financial adjustments.
An examination of the total remuneration package, which includes short-term employment benefits, stock options, and other long-term incentives, provides a broader perspective of the adjustments. In the first three quarters of FY24, Maheshwari received Rs 77.5 crore, as opposed to the substantially higher Rs 200.7 crore of the previous fiscal year, illustrating a clear downward trend.
This compensation reduction is not isolated to Maheshwari. Sanket Hattimattur, another co-founder and chief of staff at FirstCry, has also experienced a financial readjustment. Hattimattur’s earnings for the first three quarters of FY24 stood at Rs 8.3 crore, which contrasts sharply with the Rs 18.5 crore he received for FY23. Gautam Sharma, the chief financial officer of FirstCry, likewise saw his compensation in the first three quarters of FY24 reduced to Rs 1.6 crore from a previous Rs 4.8 crore in FY23, aligning with the theme of corporate belt-tightening.
Amid these shifts in executive compensation, additional reports from January indicated that prior to the IPO filing, Maheshwari liquidated 6.2 million shares valued around Rs 300 crore. This move followed an earlier disposition where he offloaded 9.34 million shares in the six months leading up to the IPO documentation submission in December the previous year. Such steps possibly point towards a strategic financial realignment as the company stands on the cusp of going public.
Written with the keen attention to the shifting dynamics of corporate India, this report lends insight into the fiscal strategies that are often implemented in the lead-up to a significant event such as an IPO. Executives at FirstCry appear to be readjusting their compensation in response to the company’s broader financial strategies. This change aligns with the effort of presenting a favorable financial posture to potential investors, as part of the broader preparations for a heralded entry into the stock market.
While the immediate rationale behind the drastic cuts in remuneration is not fully articulated by FirstCry, such adjustments are not uncommon in companies gearing up for public market debuts. Streamlining costs, optimizing cash flow, and enhancing valuation prospects are some of the usual goals associated with such restructurings. For FirstCry, a company with a strong foothold in the specialized market of mother and child care products, this transition marks a significant milestone in its growth and development narrative.
In conclusion, as FirstCry navigates the complexities and financial recalibrations associated with an IPO, the sharp cut in the CEO’s salary is a reminder of the rapid changes that can occur at the highest levels of business. Stakeholders within the industry and prospective investors will be closely monitoring how these executive compensation adjustments play out in the wider narrative of FirstCry’s stock market debut and the company’s subsequent performance in the competitive e-commerce market.
