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

The Economic Times - - Front Page -

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

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