CEOs rake in moolah amid fall­ing prof­its

Be­sides Apollo Tyres, 26 large listed firms give dou­ble-digit hikes to top ex­ec­u­tives de­spite a de­cline in net profit

Business Standard - - FRONT PAGE - KR­ISHNA KANT

Aspe­cial­res­o­lu­tion­tore­ap­point Neer­a­jKan­war­manag­ingdi­rec­tor ofApol­loTyres­did­not­gothrough as­mi­nor­i­tyshare­hold­er­swerenot in­ap­proval.

“Apol­loTyres’boardof di­rec­tor­swilld­is­cuss­the res­o­lu­tion­inthenextmeetingand de­ter­minethe­course­o­fac­tionto be­taken,” as­pokesper­son­forthe com­pa­ny­said­i­nas­tate­ment.

Only72.72per­centof share­hold­er­svote­d­in­favourofthe res­o­lu­tion, whichre­quireda min­i­mu­mof75per­cent share­hold­er­svot­ing­forit. Over56 per­centofthep­ub­licin­sti­tu­tions cat­e­go­ryand­near­ly49per­centof thenon-public­share­hold­er­svoted again­st­there­ap­point­ment. An­a­lystssaysomein­vestors­did no­tap­provea38.4per­centhikein Kan­war’sre­mu­ner­a­tionto~427.6 mil­lionas­the­com­pany’snet­profit de­clined34.1per­cent.

Apollo Tyres is among 27 large listed com­pa­nies that gave dou­ble-digit hikes to their top man­age­ment in FY18 de­spite a de­cline in prof­its dur­ing the pe­riod.

Ex­ec­u­tivesalariesinIn­dia’stop list­ed­com­pa­nieswereup20.4per cen­ton­aver­age­dur­ing2017-18, in­cludingem­ploy­ee­stock­op­tions, against17.8per­cent­growthinthe com­pany’snet­prof­i­tand12.9per cen­tyear-on-year­growthin­net saleslast­fis­ca­lyear.

Bhar­tiAirtelMDandCEO GopalVit­tal­go­ta36per­centhike in­re­mu­ner­a­tion­eve­nas­the com­pany’snet­prof­it­de­clinedby over70per­cent. Ul­traTech Ce­ment’sMDKKMa­hesh­warigot a90per­centin­crease, thoughthe net­prof­it­de­clined18per­cent. At tyre­mak­erMRF, forex­am­ple, the com­bine­dremu­ner­a­tionforthe com­pany’stopthree­p­ro­moter ex­ec­u­tiveswa­sup25.3per­cent YoYinFY18, again­s­ta24per­cent de­clineinthe­com­pany’sprof­its lastyear.

An­other 18 com­pa­nies re­warded their top ex­ec­u­tives with dou­bledigit hikes in FY18 de­spite flat earn­ings last year. An­a­lysts say the grow­ing di­vide be­tween the com­pany’s per­for­mance and the top man­age­ment’s re­mu­ner­a­tion could trigger greater scru­tiny from mi­nor­ity share­hold­ers, es­pe­cially where in­sti­tu­tional share­hold­ing is large enough. The anal­y­sis is based on fi­nan­cial data of a com­mon sam­ple of 172 listed com­pa­nies whose au­dited bal­ance sheets con­tain­ing top man­age­ment com­pen­sa­tion for FY18 are avail­able. The data in­cludes only those ex­ec­u­tives or board mem­bers whose com­pen­sa­tion was ~10 mil­lion or more. Re­mu­ner­a­tion in­cludes fixed salary, vari­able pay and em­ployee stock op­tions, if any.

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