Director vs Managing Director who is higher — Salary, Rank, Powers & Difference (India 2025)
Director vs Managing Director — Salary, Roles, Powers & Difference Explained (India 2025)
Are you confused about Director vs Managing Director — who is higher, what’s the difference in salary, or how their powers differ in Indian company law? This detailed guide explains everything about Director vs Managing Director vs CEO with clear examples, tables, and FAQs — perfect for business students, entrepreneurs, and professionals.
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What is a Director?
A Director is a member of the company’s Board of Directors appointed to manage and oversee the organization’s affairs. Directors represent shareholders’ interests and participate in decision-making through board meetings. They can be Executive Directors (actively managing operations) or Non-Executive Directors (advisory roles).
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What is a Managing Director (MD)?
A Managing Director (MD) is a senior executive who manages the daily operations of the company and ensures the implementation of board policies. In simple words, the MD is a Director with executive powers — the link between the board and the company’s management team.
Director vs Managing Director — Key Differences
| Feature | Director | Managing Director (MD) |
|---|---|---|
| Meaning | Member of the Board responsible for overall supervision | Executive head responsible for managing company operations |
| Position in Hierarchy | Below Managing Director | Higher than Director |
| Role Type | Strategic, governance-oriented | Operational, execution-oriented |
| Appointed By | Shareholders / Board | Board of Directors |
| Powers | Limited to board decisions | Full authority over day-to-day business management |
| Company Law Definition | Defined under Section 2(34) of Companies Act, 2013 | Defined under Section 2(54) of Companies Act, 2013 |
| Example | Board members of Infosys or TCS | CEO/MD like Sundar Pichai (Google India) |
Who is Higher — Director or Managing Director?
The Managing Director (MD) is higher than a Director. While both are board members, the MD has executive control and represents the company in all operations. In contrast, ordinary Directors mainly participate in board meetings and decision-making processes.
Director vs Managing Director Salary (India 2025)
| Position | Average Annual Salary (India) | Experience Level | Bonus/Perks |
|---|---|---|---|
| Director | ₹25–₹60 lakhs | 10–20 years | Profit share, sitting fees, stock options |
| Managing Director | ₹80 lakhs – ₹3 crores+ | 15–25 years | ESOPs, annual bonus, company car, profit-linked pay |
Note: Salaries vary depending on industry, company size, and whether it’s a public or private limited firm. In multinational or listed companies, Managing Directors earn several crores annually.
Director vs Managing Director vs CEO — Comparison
| Position | Role | Reports To | Focus Area |
|---|---|---|---|
| Director | Part of the board, provides strategic direction | Board / Shareholders | Policy and governance |
| Managing Director | Executes board policies, runs day-to-day operations | Board of Directors | Execution and performance |
| CEO (Chief Executive Officer) | Head of all management functions, vision & leadership | Board / Chairman | Strategic leadership and business growth |
Difference Between Director and Managing Director in Company Law (India)
Under the Companies Act, 2013:
- Section 2(34): Defines “Director” as any person appointed to the Board of a company.
- Section 2(54): Defines “Managing Director” as a Director entrusted with substantial management powers.
This means a Managing Director has legal authority to act on behalf of the company, sign contracts, and make executive decisions — unlike an ordinary Director.
Regional Director vs Managing Director
A Regional Director (RD) is a senior officer under the Ministry of Corporate Affairs (MCA), who supervises company law compliance regionally. In contrast, a Managing Director is an internal executive of a company. So, RD > MD in terms of regulatory authority, but they operate in different contexts — RD represents the government, while MD represents the company.
Director vs Managing Director in Investment Banking
In investment banks (like Goldman Sachs, JP Morgan, etc.), the hierarchy differs:
- Director: Mid-senior leadership managing specific teams or clients.
- Managing Director (MD): Top-level executive overseeing regions, sectors, or major deals.
Thus, in investment banking, the Managing Director is significantly higher than Director in both authority and compensation.
At a Glance — Director vs Managing Director Comparison
| Criteria | Director | Managing Director |
|---|---|---|
| Hierarchy | Below MD | Above Director |
| Nature of Role | Strategic / Advisory | Executive / Operational |
| Legal Reference | Section 2(34), Companies Act | Section 2(54), Companies Act |
| Average Salary (India) | ₹25–₹60 lakhs | ₹80 lakhs – ₹3 crores+ |
| Authority | Limited | Full operational authority |
| Reports To | Board / Chairman | Board of Directors |
Frequently Asked Questions (FAQ)
Q1: Director vs Managing Director — Who is higher?
A: The Managing Director is higher. MD holds executive powers and leads the company’s operations, while a Director is part of the governing board.
Q2: What is the salary difference between Director and Managing Director in India?
A: A Director earns ₹25–₹60 lakhs annually, while a Managing Director can earn ₹80 lakhs to ₹3 crores or more depending on company size.
Q3: Can a company have both CEO and Managing Director?
A: Yes, many Indian companies have both. The CEO focuses on strategy and leadership, while the MD manages operations and execution.
Q4: Who is senior — Regional Director or Managing Director?
A: The Regional Director (under MCA) is a government officer supervising compliance, so legally senior in authority — but they work in different domains.
Q5: What is the difference in Company Law between Director and MD?
A: As per Companies Act, 2013, Director is defined in Section 2(34) and Managing Director in Section 2(54) — with the MD having substantial management powers.
Conclusion
In summary, the Managing Director is the top executive responsible for implementing board decisions and managing company operations. A Director contributes to policy-making but lacks executive powers. So in every sense — **Managing Director is higher than Director**, both in hierarchy and salary.
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