The government today said there is no provision under the law to cap the remuneration of employees at public companies except for managerial personnel at the board level.

“Under section 198 of the Companies Act, 1956, the total managerial remuneration to be paid to a board level managerial personnel of any public company and subsidiary of any such public company with only one Managing Director/Whole Time Director can be up to five per cent of its net profit,” the Corporate Affairs Minister, Sachin Pilot said.

In a written reply to the Rajya Sabha, the Minister said that where the company has more than one Managing Director/ Whole Time Director, the limit of remuneration is 10 per cent of the net profit.

Such companies cannot pay remuneration higher than the prescribed ceiling to these personnel without the approval of the central government, he added.

“These limits apply to all public companies irrespective of the nature of their business. For other personnel, no ceiling on remuneration is provided under the law,” the Minister said.

Generally, an entity is considered as a public company when the minimum paid up capital is Rs 5 lakh, among other criteria.

Pilot was responding to a query on whether the government has plans to regulate abnormal pay packages, amounting to crores of rupees, being given by various TV media network, film distribution companies to their directors/ producers/ artistes involving film production, owning the satellite and telecast rights.

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