Karthik Sarma
AVIS BUDGET GROUPAbout Karthik Sarma
Karthik Sarma, age 50, has served on the Avis Budget Group board since May 2020. He is Managing Partner at SRS Investment Management, which he founded in 2006; previously he was a Managing Director at Tiger Global Management (joined 2001) and a consultant at McKinsey & Company in New York. He holds a B.Tech. from the Indian Institute of Technology, Chennai and an M.S. from Princeton University. He chairs the Compensation Committee and sits on the Corporate Governance Committee, and the Board has affirmatively determined he is independent under Nasdaq rules. He is a significant beneficial owner via SRS, with 17,430,882 shares (49.6% of common stock), plus notional exposure to 2,862,283 shares through cash-settled equity swaps; SRS has voting commitments on shares held above 35% under a Cooperation Agreement.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| SRS Investment Management | Managing Partner; Founder | 2006–present | Leads investment strategy; major shareholder of CAR |
| Tiger Global Management | Managing Director | 2001–2006 (prior to founding SRS) | Technology and investment expertise applied to growth and operations |
| McKinsey & Company (NY) | Consultant | — | Strategic and operational advisory experience |
Board Governance
| Committee | Role | Meetings Held in 2024 |
|---|---|---|
| Compensation | Chair | 4 |
| Corporate Governance | Member | 3 |
- Independence: Board affirmed Sarma is independent under Nasdaq rules; all members of Compensation, Corporate Governance and Audit Committees are independent.
- Attendance: Board met 7 times in 2024; all directors attended at least 75% of Board and committee meetings during their service periods.
- Board leadership: Executive Chairman Jagdeep Pahwa; Lead Independent Director Lynn Krominga; all standing committees fully independent.
- Compensation Committee composition and interlocks: Compensation Committee comprises Sarma (Chair), Krominga, and Lurie; no member is/was an officer/employee. Note: Related-person transactions involving SRS may potentially confer indirect interests for Sarma.
Fixed Compensation
Director Fee Structure (2024)
| Component | Annual Amount |
|---|---|
| Base non-employee director retainer | $250,000 |
| Lead Independent Director retainer | $30,000 |
| Audit Committee Chair | $35,000 |
| Audit Committee Member | $15,000 |
| Compensation Committee Chair | $30,000 |
| Compensation Committee Member | $15,000 |
| Corporate Governance Committee Chair | $30,000 |
| Corporate Governance Committee Member | $12,000 |
- Payment mix: 50% cash (quarterly) and 50% annual RSU award (vests on one-year anniversary); annual cap 30,000 units. Directors may elect deferrals under the NED Plan; no meeting fees or insurance benefits.
- Stock ownership guidelines: Non-employee directors must retain at least 50% of net shares until holding 5× annual cash retainer; as of Dec 31, 2024, all current directors subject to guidelines exceeded thresholds except Anu Hariharan; Pahwa not subject due to SRS policies.
2024 Director Compensation – Karthik Sarma
| Year | Cash Fees ($) | Stock Awards ($) | All Other ($) | Total ($) |
|---|---|---|---|---|
| 2024 | — | — | — | — (waived) |
Sarma waived compensation for Board service in 2024.
Performance Compensation
| Award Type | Grant Date | Units/Shares | Grant-Date Fair Value ($) | Vesting Schedule | Performance Metrics |
|---|---|---|---|---|---|
| Director RSUs (policy) | Annual | Determined by 50% of Director Fees | Computed per ASC 718 | One-year anniversary | None; time-based vesting |
| Karthik Sarma (2024) | — | — | — | — | None (waived) |
- Directors’ equity awards are time-based; no revenue/EBITDA/TSR performance metrics apply to director compensation.
Expertise & Qualifications
- Technology sector experience; financial and investment expertise; experience providing strategic and operational advice; diverse personal background.
Equity Ownership
| Holder | Shares Beneficially Owned | Percent of Outstanding | Shares Acquirable within 60 Days | Notional Exposure via Swaps |
|---|---|---|---|---|
| Karthik R. Sarma / SRS Investment Management | 17,430,882 | 49.6% (based on 35,111,845 shares outstanding) | — | 2,862,283 cash-settled equity swaps (~8.2% of outstanding) |
- Voting commitments: Under the Cooperation Agreement, SRS has committed to vote any shares held in excess of 35% proportionally with other shares cast.
- Anti-hedging/pledging policy: Company prohibits hedging, pledging, and margin; however, SRS and affiliates are not subject to director policies on pledging/margin/derivatives per Cooperation Agreement, provided compliance with law. Audit Committee monitors any proposed pledges including by SRS.
Related-Party Exposure
| Counterparty | Relationship | Transaction Details (FY2024) |
|---|---|---|
| Avis Mobility Ventures LLC (AMV) | Majority owned by SRS Mobility Ventures, an affiliate of SRS; Company owns a minority interest | Company provides vehicles and fleet/admin services; recognized $2 million expense; $3 million receivables; $74 million net investment in vehicle finance leases at year-end. |
Governance Assessment
- Independence and committee leadership: Sarma is independent under Nasdaq rules and chairs the Compensation Committee; committees are fully independent—supportive of board effectiveness.
- Ownership alignment: Extremely high ownership (~49.6%) via SRS creates strong alignment with common shareholders but also concentrated influence. The Cooperation Agreement’s pro-rata voting of shares above 35% partially mitigates control risk.
- Policy exceptions and derivative exposure: SRS is exempt from director anti-pledging/derivative restrictions, and maintains significant notional swap exposure—this is a governance risk requiring vigilant Audit Committee oversight. RED FLAG: potential pledging/derivative activity by the largest shareholder exempted from standard director policies.
- Related-party transactions: AMV arrangements (expenses, receivables, leasing exposure) create potential conflicts of interest given SRS affiliation. RED FLAG: material related-party exposure ($74 million net investment) necessitates robust Audit Committee review.
- Compensation governance: As Compensation Committee Chair, Sarma waived his own director compensation in 2024, reducing direct pay-related conflicts; however, the proxy notes potential indirect interest via SRS in related-person transactions—ongoing disclosure and independent committee oversight are key.
- Attendance and engagement: Met at least 75% attendance threshold; Board held seven meetings in 2024, indicating regular engagement.