Though shareholders are the owners of the company, Directors are the persons who actually manages the business. They hold fiduciary position and profitability depends upon the decisions taken by them.
Directors do play a vital role and benefits they get for their efforts is the remuneration.
It is also a fact that Directors are not the owners and therefore the major portion of the profits cannot be distributed to them by way of remuneration. In some cases, it may even happen that the company is under loss and Directors are paid higher remuneration. Under the provisions of the Act, certain restrictions has been imposed on remuneration. If Company's profit is inadequate or incurs losses. Also, if the remuneration is given for any services rendered by such Directors which are of professional nature it will not be covered under the limits.