InvestorQ : Why are fund managers unhappy with the SEBI rule to pay part of their salary package in their own fund units?
Niti Shenoi made post

Why are fund managers unhappy with the SEBI rule to pay part of their salary package in their own fund units?

Answer
image
ishika Banerjee answered.
3 days ago
Follow

SEBI proposed to pay senior personnel of mutual funds, 20% of their pay as units rather than cash. This will also come with a lock-in period when the units cannot be redeemed but can be borrowed against. SEBI believes that this would bring greater alignment between the goals of the fund manager and the investors. Conceptually, the idea does look fair.

Fund managers are unhappy for a number of reasons. Firstly, they think they are being unfairly targeted. Some fund managers have rightly argued about its implications for asset allocation and risk appetite of the individual fund manager. It could lead either lead to excess risk or too little risk. Lastly, MFs feel they are being singled out for the actions of a few persons. Such a risk also exists in companies, but here is no such restriction there.

1 Views