The salary of the Chief Executive Officer of fintech unicorn triggered a fierce debate on the internet.
On Sunday evening, entrepreneur Kunal Shah held a candid ‘Ask Me Anything’ session on Instagram, where his followers posted series of questions.
In response to one of the queries, Shah disclosed that he draws Rs 15,000 per month, saying that he did not believe in charging a high salary as the company is yet to turn 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 in response to question “Your Salary at Cred is so low. How do you survive?”
The netizens were left divided over the “low” pay. While some applauded the entrepreneur for his decision, others debated that this is not a rare instance for a CEO or a founder to draw such low salary as they receive other forms of compensations like stocks and bonuses.
Jack Dorsey, former Twitter CEO; Elon Musk, CEO at Tesla and SpaceX; and Mark Zuckerberg, Meta founder, were reported to draw $1 per year while being tied with performance-based compensation plans.
Some even termed this as a “tax saving” strategy, with one user commenting, “Bro, it’s called tax saving. He definitely spending millions on his lifestyle.”
Another user added, “Bro what are you talking about most of his startups are loss making and burning investor’s money he should take 0 salary and focus on making the startups profitable rather than making bonfire the fundings that he gets.”
“His angel investments will also be giving him income as when he exits from investments,” commented another person on the social media platform, while some questioned how much he sold in the secondary market.
An internet user stated, “being humble and flexing in the same sentence. His words always poke me to be curious.”
Why CRED is not profitable?
Another Instagram user highlighted the company’s losses and asked the founder why CRED wasn’t profitable yet.
On this, Shah reverted, “Most venture funded companies are built differently than common businesses that trade where you buy cheap and selll goods with some margin”.
“Tech companies invest capital for several years in building large distribution and engagement before they monetise,” he added.
CRED reported a net loss of Rs 1,279 crore in FY22, despite the platform’s revenue surging from Rs 95 crore in FY21 to Rs 422 crore. Meanwhile, the startup’s marketing and business promotion expenses accounted for more than Rs 975 crore.
