Mumbai: India’s stock markets are falling, its economy is slowing, investor sentiment is down and the corporate outlook gloomy but, the pay packets of the top brass at many listed companies have gone in one direction: up.
The 10 highest compensated corporate executives in Indian listed firms received an average 64% pay hike in the financial year through March, compared with the previous year. While 2007-08 was a good year for Indian firms and stock markets, the hikes are well above the average growth in net profit and share prices of these firms during that period, which was under 40%.
Mint examined salaries of directors of those listed Indian firms, including chief executives, based on annual reports that are currently available for companies for 2007-08. (
Compensation packages of 100 Indian business leaders have been specially compiled for Mint readers. Access this onwww.livemint.com/compensation.htm) The study excludes firms that haven’t yet reported the data and this means several key chieftains, whose 2007-08 compensation levels could significantly alter this analysis, are not included though experts say it is unlikely to alter the overall trends of handsome increases in rewards for 2007-08 performance.
For example, the compensation details of Anil Ambani, the second richest individual in India, couldn’t be ascertained as his flagship firms are yet to publish their annual reports. Similarly, the likes of Anand Mahindra, vice-chairman and managing director of auto maker Mahindra and Mahindra Ltd, and Adi Godrej, chairman and managing director of Godrej Consumer Products Ltd, are not part of this analysis.
Compensation includes basic pay, perquisites and other allowances, and commissions or performance-linked bonuses.
India’s richest individual, Mukesh Ambani, also continues to be the highest paid chief executive at the helm of Reliance Industries Ltd, the country’s largest private firm by market value.
The elder of the Ambani brothers got 125% more compensation than the second highest paid CEO in India, Ranbaxy Laboratories Ltd’s Malvinder Mohan Singh, who in June sold his shareholding in India’s largest drug maker by sales to Japan’s Daiichi Sankyo Co. Ltd.
Ambani cost Reliance Rs44 crore during fiscal 2008, up 44% from his previous year’s compensation of Rs30.46 crore. Singh, on the other hand, got Rs19.59 crore, almost 200% higher than what he had got in 2007.
Reliance Industry’s net profit in fiscal 2008 rose 25.22% but, its market value soared 65% in a year when India’s benchmark equities index, Sensex, rose less than 20%. In Ranbaxy’s case, net profit rose 52% even though Ranbaxy’s market value climbed a more modest 24.43%.
India’s third highest compensated chieftain is Sunil Bharti Mittal of Bharti Airtel Ltd, which operates retail and financial services business, besides its flagship, one of the largest telecommunications networks in India.