India’s top bosses salaries rise marginally in FY17
Early trends show that India’s biggest firms have cut back on pay increases for their top executives. A study of 19 of the 30 Sensex firms for which data is available shows that the median increase in the top salary as just 2.3% in fiscal 2017 compared to 19.2% in the year ago. This is the slowest pace in the last at least four years, shows data compiled by Bloomberg.
Similarly, for 50 firms from the BSE 500 grouping, the median rise in top pay was 10.4%, down from the 16.3% in fiscal 2016. The study looks at the single highest remuneration paid in the year by the company irrespective of designations such as chairman, chief executive office or executive director.
Bloomberg data also adds stock options to the total compensation figure wherever it is available.
For the blue chip sample set, the top executive remuneration has grown at a slower pace compared to employee costs for the first time in two years.
Overall employee costs grew at 9.73% for this set of firms, albeit at a slower pace compared to 11.14% in FY16. Employee compensation for the BSE 500 companies rose faster at 10.76% in fiscal 2017.
“Salaries and bonuses of executives in under-performing sectors like information technology, retail and pharmaceutical dropped due to industry specifics woes which hampered business,” said a consultant from KPMG India who wished to remain anonymous as he isn’t authorised to talk to the media. Data shows that top earners in companies such as Infosys Ltd, Wipro Ltd and Dr Reddy’s Ltd taking a pay cut.
However, the highest paid corporate executive this year Nikhil Meswani Pawan Munjal Desh Gupta Natarajan Chandrasekaran Sunil Mittal Rajiv Bajaj Vishal Sikka Sanjiv Mehta Abid Ali Neemuchwala (from data available so far) is CP Gurnani, chief who took home ₹150 crore, shows data from Bloomberg.
For Tech Mahindra, the payout is 16% lower than the ₹179.5 crore given to vice-chairman Vineet Nayyar in 2015-16.
Among the Sensex firms, Nikhil Meswani and Hital Meswani, executive directors at Reliance Industries Ltd drew ₹80.76 crore, higher than chairman Mukesh Ambani who’s capped his pay at ₹15 crore for some years now. The Meswanis’s higher payout this year was owing to ₹64.18 crore of stock options. In fiscal 2016, Ambani’s ₹15 crore was the highest executive payout from India’s most valuable firm.
They were followed by Pawan Munjal, chairman, managing director and chief executive officer of Hero MotoCorp Ltd, who drew ₹59.6 crore, 3.9% higher than a year ago.
The sharpest cut was seen in ITC – the firm’s highest payout fell 82%.
This was followed by Infosys Ltd’s Vishal Sikka, drew 67% lower than a year ago at ₹16 crore and Satish Reddy, co-chairman of Dr Reddy, whose ₹7.24 crore payout was nearly 40% than fiscal 2016’s remuneration to GV Prasad, co-chairman
With the goods and services tax expected to shake up things in the first half of this fiscal year, there might not be a sharp rise this year as well.
KPMG in India’s Annual Compensation Trends Survey which sampled 263 companies across 19 sectors has projected a decrease in average increments in 2017-18.
“The maximum decrease is projected by the banking and financial sector where financial services sector has decreased the increment to 8.1% from 9.7%. The energy sector projected minimum decrease to 9.1% from 9.3%,” it said in a report released in March 2017.