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Help Sun TV profits fall
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Marans take a pay cut as Sun TV profits fall

Kalanithi Maran and wife Kaveri Kalanithi, promoters of Sun TV, have seen their remuneration fall for the first time in recent years. The company’s profit came under pressure in 2011-12 and the Marans took home a package of Rs.114 crore (Rs.57 crore each), down by 11% from last year.

In 2006-07, the combined salary of the couple was Rs.46.5 crore.

Interestingly, the decline in the compensation of the promoters is in line with the fall in the company’s net profit for the year. Sun’s net profit for 2011-12 fell 10.62% to Rs.694.65 crore.

In April, the Chennai-based media conglomerate saw a change of guard, and the board of directors elevated Kalanithi Maran to executive chairman. K. Vijay Kumar, 47, who was CEO, was also made managing director of the company.

Sun TV Network’s annual report said the salary and perks paid to the executive chairman (formerly chairman and managing director) was Rs.57 crore. Kaveri Kalanithi, the executive director (formerly joint managing director) took home a similar package.

The remuneration of both promoter directors has fallen as the profitability of Sun TV Network was hit by state-run Arasu Cable and did not have a blockbuster movie release like Enthiran for the financial year ended March 2012,” said a Mumbai-based analyst who tracks the company but did not want to be named.

His reference is to the state government’s launch of a cable distribution company to break the monopoly of Sumangali Cable Vision (SCV), the cable arm of Sun TV.

According to the Companies Act, the managing director may be paid remuneration either by way of a monthly payment or a specified percentage of net profits of the company. Such remuneration cannot exceed 5% or 10% (for all such directors) of the company except with the approval of the central government.

There were two key factors that affected the firm’s financial performance, S.L. Narayanan, group chief financial officer, Sun Group, said in May 2012 while announcing financial results. The Arasu launch had resulted in net profit being dented to the tune of about Rs.48 crore (a revenue loss of Rs.77 crore), he said, adding, “Secondly, we did not have the benefit of Enthiran this year.” The success of the movie featuring Rajnikant had resulted in a profit of Rs.24 crore for the company in fiscal 2011, he said.

   

In 2008-09, Kalanithi Maran and Kaveri Kalanithi were the highest paid executives in corporate India taking home a salary of Rs.74 crore (Rs.37 crore each).

Shares of Sun TV Network closed at Rs.297.65, up 0.76%, while the benchmark Sensex closed 0.73% lower at 17,313.34 points.

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