SBI CMD’s salary is too lit­tle com­pared to HDFC Bank MD’s

Financial Chronicle - - FRONT PAGE - FALAKNAAZ SYED

STATE Bank of In­dia (SBI), one of the world’s 50 largest banks, pays a pit­tance to its top man­age­ment per­son­nel when com­pared to salaries earned by their coun­ter­parts in top pri­vate banks.

SBI chair­man and man­ag­ing direc­tor Ra­jnish Ku­mar drew a gross salary of Rs 14.25 lakh for six months since tak­ing over as the bank chief in 2017-18. Ku­mar was el­e­vated to the post on Oc­to­ber 7, 2017. His re­mu­ner­a­tion as SBI chief con­sist- ed of ba­sic salary of Rs 13.48 lakh and a dear­ness al­lowance of Rs 73,968 and other com­po­nent of Rs 3,000, ac­cord­ing to SBI an­nual re­port for 2017-18.

In stark con­trast, the re­mu­ner­a­tion of Aditya Puri, man­ag­ing direc­tor of HDFC Bank, was Rs 9.64 crore, says the bank’s an­nual re­port for 2017-18. He liq­ui­dated stock op­tions worth Rs 31.4 crore dur­ing the year. Out of the to­tal re­mu­ner­a­tion of Rs 9.64 crore in FY18, Puri’s gross salary was Rs 7.26 crore.

Other re­mu­ner­a­tions, in­clud­ing prov­i­dent fund and tax ex­empted por­tion of su­per­an­nu­a­tion, were Rs 55.89 lakh. If the Re­serve Bank of In­dia (RBI) ap­proves the bonus to be paid to Puri, his salary would rise. “At present, the bonus per­tain­ing to the year 2016-17 pro­posed to be paid out in FY 2017-18 is pend­ing RBI ap­proval. Af­ter the RBI ap­proval is ob­tained, the ap­proved amount, if any, will be paid and dis­closed in the cor­po­rate gov­er­nance re­port for the next fi­nan­cial year,” said HDFC Bank in its an­nual re­port.

Ashvin Parekh, man­ag­ing part­ner, Ashvin Parekh Ad­vi­sory Ser­vices, said, “The CEOs and MDs of pub­lic sec­tor banks also have more or less the same set of du­ties and re­spon­si­bil­i­ties that one may see in case of pri­vate sec­tor banks. De­spite a lot of prom­ises and dis­cus­sions by the gov­ern­ment, the reg­u­la­tor and the Bank Board Bureau (BBB), the real changes are yet to be seen with re­gard to the com­pen­sa­tion ap­proach.”

For­mer RBI gov­er­nor Raghu­ram Ra­jan had flagged the low re­mu­nera- tion a few years ago, say­ing it makes dif­fi­cult for sta­te­owned banks to “at­tract top tal­ent, es­pe­cially a lat­eral en­try.” He had said that state-owned banks tended to over­pay at the bot­tom but un­der­pay their top ex­ec­u­tives. An­nual re­ports of ICICI Bank and Axis Bank for FY18 are not out yet. In 2016-17, Chanda Kochhar, MD and CEO of ICICI Bank, had earned a to­tal com­pen­sa­tion of Rs 6.09 crore. This is in stark con­trast to the gross salary of Rs 28.96 lakh re­ceived by Arund­hati Bhat­tacharya, who was the chair­man of SBI then. Sim­i­larly, Shikha Sharma, MD and CEO of Axis Bank, took home a ba­sic salary of Rs 2.7 crore, and Rs 1.35 crore as vari­able pay, be­sides a host of perks and al­lowances like Rs 90 lakh HRA. Yes Bank MD and CEO Rana Kapoor, who also hap­pens to be the bank’s pro­moter, took home Rs 6.8 crore as salary in 2016-17.

HDFC Bank’s net profit in 2017-18 was Rs 17,486.8 crore, up 20 per cent from the pre­vi­ous year. SBI suf­fered a net loss of Rs 6,547.45 crore in 2017-18, against a net profit of Rs 10,484.1 crore in the pre­ced­ing fis­cal.

SBI CMD Ra­jnish Ku­mar; gross salary ` 14.25 lakh for last 6 months of FY18

HDFC Bank MD Aditya Puri; gross salary ` 9.64 crore for FY18

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