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
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.