Clause 197 - Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits.

Managerial remuneration caps: excess payments require shareholder and governmental approval and may be recoverable by the company.

Total managerial remuneration payable by a public company to its directors, including managing and whole-time directors and manager, is limited to an overall percentage of net profits computed as prescribed; increases beyond that require shareholder approval and Central Government sanction and must comply with Schedule V. Sub-limits apply to managing executive directors and to non-executive directors, fees for board attendance are separate within prescribed limits, independent directors may receive only commission or fees and not stock options, and excess payments must be held in trust and refunded.