Aman Me­hta Earns Most from Six Firms

The Economic Times - - Pure Pol­i­tics -

Aman Me­hta, for­mer HSBC Asia Pa­cific CEO is next. Me­hta, 69, got Rs 2.3 crore for be­ing on the board of Tata Con­sul­tancy Ser­vices (TCS), the coun­try’s lead­ing IT out­sourc­ing com­pany. Ron Som­mer, chair­man of MTS, for­mer Sebi chair­man M Damodaran and banker KV Ka­math tie for the third spot with their earn­ings of about Rs 2 crore each from a sin­gle ecom­pany in fis­cal 2015. The 66-year-old Ger­man cit­i­zen serves on the board of TCS and Damodaran, 66, is on the board of Tech Mahin­dra. KV Ka­math was on the board of In­fosys be­tween 2009 and 2015.

Suc­ceed­ing the trio is Al­bert Joseph Hieron­imus, 68, who got Rs 1.72 crore for be­ing on the board of Ben­galu­rubased soft­ware firm MindTree. Next is Clay­ton Ma­gleby Chris­tensen. The 63-year-old Chris­tensen, best known as the ar­chi­tect of dis­rup­tive in­no­va­tion, earned Rs 1.55 crore as an out­side di­rec­tor of TCS. He’s fol­lowed by fel­low Amer­i­can scholar Jef­frey Sean Lehman, 59, who got Rs 1.20 crore as an ex­ter­nal di­rec­tor at In­fosys.

Robin Ann Abrams, 64, is the high­est­paid for­eign woman in­de­pen­dent di­rec­tor at an In­dian com­pany. The for­mer CEO of US-based Palm Com­put­ing earned nearly Rs 1crore from be­ing on the board of HCL Tech­nolo­gies.

“Com­pa­nies don't bring well-known di­rec­tors on board for cos­metic rea­sons but these peo­ple add tremen­dous value in terms of their well-rounded in­ter­na­tional ex­pe­ri­ence, un­der­stand­ing of spe­cialised sec­tors and the dy­namic reg­u­la­tory en­vi­ron­ment,” said R Suresh, MD of RGF Ex­ec­u­tive Search.

In­de­pen­dent di­rec­tors are paid sit­ting fees and com­mis­sions. Sit­ting fe- es don’t amount to much while com­mis­sions are more sub­stan­tial. Com­mis­sion paid to an in­de­pen­dent di­rec­tor, as per the Com­pa­nies Act, can’t ex­ceed 5% of profit at a listed com­pany. In fis­cal 2015, Ver­waayen got Rs 2.41 crore as com­mis­sion and Rs 7 lakh in sit­ting fees while Me­hta got Rs 2.28 crore as com­mis­sion and Rs 1. 5 lakh in sit­ting fees. The rules don’t al­low non-ex­ec­u­tive di­rec­tors to get stock op­tions, by the way. Su­nit Mehra, man­ag­ing part­ner of ex­ec­u­tive search com­pany Hunt Part­ners, pointed out that in­creased scru­tiny—United Spir­its be­ing a case in point—means that an in­de­pen­dent di­rec­tor’s job is hardly a cushy one.

“Be­ing a di­rec­tor on a listed board is an oner­ous task, with sig­nif­i­cant li­a­bil­i­ties. Also, to ef­fec­tively con­trib­ute and dis­charge re­spon­si­bil­i­ties re­quires a lot more time than just the time spent in board meet­ings. All of this mer­its a suit­able com­pen­sa­tion for the di­rec­tor,” he said.

When it comes to those with mul­ti­ple in­de­pen­dent di­rec­tor­ships at In­dian com­pa­nies, the list is headed by Me­hta. He earned Rs 3.87 crore from be­ing on the board of six com­pa­nies in­clud­ing TCS, Jet Air­ways, Cairn and Wock­hardt. Me­hta is fol­lowed by Damodaran (Rs 3.20 crore from six com­pa­nies), econ­o­mist Omkar Goswami (Rs 3.07 crore from seven com­pa­nies) and ex-State Bank of In­dia man­ag­ing di­rec­tor OP Bhatt (Rs 2.75 crore from four com­pa­nies).

In­dia’s se­cu­ri­ties mar­ket rules man­date that a per­son can be an in­de­pen­dent di­rec­tor at a max­i­mum seven listed com­pa­nies. In­de­pen­dent di­rec­tors, ac­cord­ing to Hunt Part­ners, ded­i­cate nearly nine days in a year to each board on which they serve as a mem­ber.

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