In
March 2016, SEBI issued a circular mandating that the remuneration of every fund
company’s top brass be disclosed. Apart from the remuneration of
the CEO, CIO and COO, the circular requires that fund companies publish a list
of employees whose annual remuneration is equal to or above INR 6 million, and also
the ratio of CEO's remuneration to median remuneration of employees.
Some fund
companies have recently released the requisite information on their websites.
In an earlier post, I had expressed reservations regarding the utility of these disclosures. Interestingly, the manner in which disclosures have been
made, has unintentionally revealed more than the disclosures themselves.
To begin
with, despite the deadline not all fund companies have made the relevant
disclosures at the time this post was written. Perhaps SEBI-mandated disclosures
aren’t important for some fund companies.
At their
core, the said disclosures are intended at empowering investors. Hence it would
be reasonable to assume that investors should be able to easily access them. Is that the case? Let’s find out.
Of the
top 10 fund companies (which account for roughly 80% of industry assets; read
substantial investor interest), four—Birla
Sun Life Mutual Fund, SBI Mutual Fund, UTI Mutual Fund and Franklin Templeton Mutual Fund—haven’t disclosed
executive remuneration as yet.
A common
thread running through the balance six fund companies is that only existing investors can access the
information. In other words, a prospective investor who may want to use the
information to make an investment decision is unable to do so.
Furthermore,
before accessing the information, investors are required to agree to a long
list of terms and conditions which among others, state that the information shall
not be shared with anyone in any form or manner. In other words, the disclosures are confidential in nature;
oxymoron anyone?
Now let’s
delve into how fund companies fare in terms of accessibility of
disclosures. Of the top 10, HDFC Mutual
Fund fares well. Investors can access the requisite information after
entering two data points and a CAPTCHA. All the information is available on a
single web page, and can be easily copied into other user-friendly formats.
Accessing
data on Reliance Mutual Fund’s
website is trickier. It helps to have a registered mobile number
which can be used to generate a One Time Password. Alternatively, a combination
of two or more data points are required. While the information is available in a
single web page view, it cannot be copied into another format.
ICICI Prudential Mutual Fund fares worse offering access to only one executive’s remuneration
at a time. In other words, one needs to tediously move back and forth to
access multiple data points.
While accessing
information from IDFC Mutual Fund
requires two data points and a CAPTCHA, Kotak
Mutual Fund demands six data points.
DSP BlackRock Mutual Fund holds the dubious
distinction for being most secretive
while disclosing executive remuneration. Data entered on the website leads to an
auto-generated mail being triggered to the investor’s registered email-id.
Clicking on a link therein takes the user to a webpage wherein the investor can
request for one executive’s remuneration at a time. Following this a message
flashes “Your request for information has been registered. Our Human Resources
team will reply to you shortly”. I am yet to receive any information despite passage of over
24 hours.
However
not all fund companies fail to pass muster. Two of the smallest fund companies—Quantum Mutual Fund and PPFAS Mutual Fund—have followed the disclosure
norm in letter and spirit. Not only is executive remuneration-related
information freely available on their
websites (in other words, one need not be an investor to access the information),
the information can be conveniently
accessed in the PDF format.
