Promoter Salary Normalization

Adjusting reported profits for below-market or above-market promoter compensation to reflect the true cost of a professional replacement management team.

Buyer Example

Promoter of a Coimbatore engineering job-work unit draws only ₹6 Lakh/year against a market rate of ₹36 Lakh for an equivalent professional CEO. Buyer normalizes EBITDA downward by ₹30 Lakh to reflect the real post-acquisition operating cost, tightening the offer valuation accordingly.