ICICI directors’ salary rose 12-15% in FY18
Chanda Kochhar gets 131 times the median pay
ICICI Bank’s top management took a pay rise of 12-15 per cent for financial year 2017-18. Chanda Kochhar, managing director and chief executive officer, had a rise of 15 per cent in basic takehome pay to ~31 million. A lower bonus meant her total income, excluding stock options, went up only 7.3 per cent.
Even so, she remained the highest paid official. She got 131 times the median remuneration. Other employees got a median pay hike of 10 per cent, according to the bank’s report for 2017-18.
Kochhar is now under scrutiny on allegations of conflict of interest regarding loans extended to the Videocon group. In its annual report, the bank says the Central Bureau of Investigation (CBI) initiated a preliminary enquiry against various individuals and firms, including unnamed officers and officials of the bank.
G C Chaturvedi, who became nonexecutive chairman this June, wrote to the shareholders, “In recent months, the bank has been facing questions with regards to governance. The board of directors have instituted an enquiry to examine issues relating to the same.”
Its scope, he said, would be comprehensive and and he hoped to conclude the uncertainties at the earliest. “It will be my topmost priority to uphold the best governance practices at this esteemed institution.”
In a media interaction after the monetary policy announcement on Wednesday, an official of the Reserve Bank of India (RBI) said it was aware of the developments and was dealing with the situations as they unfolded.
The private sector lender is also being investigated by market regulators here and in the US, where the bank’s American depository receipts are listed. Both the Securities and Exchange Commission there and the Securities and Exchange Board of India are mulling adjudication proceedings, against ICICI and Kochhar, on alleged violations in disclosing ‘conflicts of interest’.
The allegation is that ICICI gave a loan to Videocon, which then extended finance to Chanda Kochhar’s husband Deepak’s firm. Sebi had issued a showcause notice to Chanda Kochhar and to the bank in May. The following month, both sought more time to respond and had requested the regulator to share the documents on the basis of which the notice was served.
The board of directors of the bank instituted an independent enquiry led by former Supreme Court judge B N Srikrishna, to investigate the allegations against Kochhar. The bank had faced three whistleblower complaints during
the year, accusing it of lax controls on operations. Srikrishna was appointed after the second complaint.
On Friday, the bank reported its firstever quarterly loss, of ~1.2 billion, as provisioning for stressed loans had more than doubled. The new chief operating officer, Sandeep Bakhshi, in his letter to shareholders, said the bank would focus on streamlining of processes and empowering its team to deliver and become the banker of choice for customers “while ensuring that growth is appropriately risk-calibrated”.
Meanwhile, the bank has also flagged risks to its reputation and ability to conduct business in light of investigations by various agencies. It pointed out these risks in its filing with US capital market regulator Securities and Exchange Commission (SEC).