CRED CEO Kunal Shah recently revealed that he draws a salary of Rs 15,000 per month. On being asked why he chose to keep his salary relatively low, Shah shared on an Instagram story that he believes he shouldn't draw a large salary until the fintech company turns profitable.
“I don’t believe I should get a good salary till the company is profitable. My salary at CRED is Rs 15,000 per month and I can survive as I sold my company FreeCharge in the past," Shah wrote on Instagram.
“There are CEOs who take salaries in crores then we have Kunal Shah," a Twitter user wrote, sharing a screengrab of Shah’s Instagram story.
When asked why CRED isn't profitable yet, Kunal Shah said in another Instagram story, "Tech companies invest capital for several years in building large distribution and engagement before they monetise."
Shah's revelation about his salary, however, did not appear to please most Twitter users. Many people pointed out that this is a common practice when it comes to CEOs.
"It's pretty absurd to me that in the age of near-perfect information, most of the world still falls for the 'I only pay myself $1 salary' dedicated founder grift. Founder equity is worth 100x+ any reasonable salary and they get taxed less on it," wrote Deedy (@debarghya_das).
"Most CEOs don’t take salary because they have to pay income tax on it, they get paid in stock options which they can leverage for debt in future tax-free," commented Siddhant Srivastava (@EncrypticTV).
"Those CEOs who take salaries in crores also run businesses that earn profits in 100s of crores. When you are burning other people's cash, you are pretty much obligated to not take salaries. Most new businesses are set up like that," added Praveen CK (@PravCK).
But, there were some who came to Shah's defence.
CRED recorded a net loss of Rs 1,279 crore in the financial year (FY) 2022 even though its revenue jumped by almost 340 percent from Rs 95 crore in FY21 to Rs 422 crore in FY22, The Hindu Businessline reported.
The fintech company’s losses have more than doubled from Rs 524 crore in FY21. In a conversation with the publication, Kunal Shah attributed the losses to the company’s focus on building a community of members and building the brand. He said the company has grown to a base of 11.2 million members in FY22 as compared to 7.5 million in FY21.
Read more: Cred's Kunal Shah retains title as top angel investor with 67 deals in 2022
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