What is the ruling on a manager stipulating an annual 5% share of the capital, to be deducted from the profits, in addition to his salary and his share of the profit as a partner, knowing that this may consume all the profit in case of its weakness?
It is permissible for a partner who manages the company to receive a fixed salary for their management. As for the mentioned percentage, if it is part of the salary paid upon the realization of profit and not disbursed from the capital in the absence of profit, then there is no objection to it. However, if the percentage is taken by virtue of partnership and not in exchange for management, or if it is a known amount or an unknown portion of the profit, then it is not permissible and invalidates the partnership. Similarly, it is not valid if the manager's wage is linked to profit such that they receive nothing if no profit is made, as this falls under (excessive uncertainty/risk).
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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