Nifty CEOs’ Salary 237 Times Median Pay at Their Cos
Top executives also got average annual hike of 49% compared with 7.5% for the rest in FY16
Kiran Kabtta Somvanshi
ET Intelligence Group: The Infosys controversy has brought executive pay to the fore, with the board facing criticism over CEO Vishal Sikka’s salary. So how much do Indian CEOs get in relation to the pay scale at their companies?
On average, a Nifty CEO’s annual remuneration was ₹ 13 crore, 237 times the median wage, according to an ETIG study of the pay ratio data provided in the FY16 annual reports of 38 of the 50 companies that comprise the index. CEOs got an average annual increase of 49% compared with 7.5% for everybody else, according to the pay ratio data, which nonstate companies are required to disclose.
In terms of the multiple, Sikka tops the list. His remuneration of ₹ 48.7 crore is 935 times the median pay of Infosys employees. Also, his compensation rose 752% over the previous year but that’s largely because variable pay of two years was paid together. Four of the top 10 companies on pay ratio are from the IT sector. As for the best-paid Nifty CEO, that’s Pawan Munjal of Hero MotoCorp at ₹ 57.4 crore, 755 times the median remuneration at the company. “Compensation philosophy and composition is market-driven and supply-demand driven now,” said Murthy Uppaluri, CEO of executive search firm Randstad India. “Companies want to pay a premium due to (` Cr)
Sikka’s salary of 48.7 cr is 935 times the median pay of other Infosys employees
^ Includes Variable Pay for FY15 and FY16 * Includes the perquisite value on stock options exercised (Source: Company Annual Reports)
the risk the CEOs take and the talent which they have. Unlike the employees at the lower management, the compensation of the top management is tied to the profitability, sustainability and stability of the organisation.”
One expert said however that comparisons with average pay may be preferable in companies with a large workforce. “Average would be a better measure to gauge the pay gap between the CEO and the rest of the employees,” said JN Gupta, cofounder of Stakeholders Empowerment Services. “Median, being the middle-most value, distorts the result in case of firms having large blue collar work force.”
ARINDAM MC Govardhana Rangan & Saloni Shukla