New Delhi: When it comes to earning money, Mukesh Ambani is way ahead of not only his younger brother Anil, but the top brass of entire India Inc.
With a package of close to Rs 25 crore, Mukesh takes home over ten times the annual remuneration of his brother Anil - with whom he parted ways over two years ago.
When the brothers were together, they got a package of Rs 21.9 crore each at Reliance Industries in the financial year 2004-05, according to information available in the company’s annual report.
While Mukesh continues to hold the position of Chairman and Managing Director at Reliance Industries, Anil was the Vice-Chairman and Managing Director till June 18, 2005.
In the latest fiscal year ended March 2007, Mukesh Ambani took home a total Rs 24.51 crore as CMD of RIL, which is the highest among more than 10,000 top executives and directors at about 1,200 companies that have disclosed so far their annual remuneration figures for the year.
Anil Ambani does not even figure in the top-100 list with a total remuneration of about Rs 2.42 crore from three of his group companies - Reliance Energy, Reliance Communications and Reliance National Resources Ltd (RNRL). Anil’s package as REL Chairman was Rs 2.34 crore, while as R-COM and RNRL Chairman he got Rs 4.8 lakh and Rs 3.2 lakh respectively.
RIL CMD is closely followed by Sun TV CMD Kalanithi Maran and Joint MD Kavery Kalanithi, whose annual remuneration stood at Rs 23.26 crore each in 2006-07.
Telecom giant Bharti Airtel’s CMD Sunil Mittal ranks at fourth position with close to Rs 15 crore, followed by Dr Reddy’s Labs Executive Chairman K Anji Reddy at the fifth rank with Rs 14.4 crore.
Besides a fixed cash package, the companies also offer performance-linked packages, stock options to the CEOs.
“If a company performs well, the CEO gets a hike of 20-30% on the fixed part of the salary. To add to it, the value of stock goes up and year after year the number of stocks also increases,” Prakash added.
It is a general practice that a CEO gets 40% of his salary at a fixed rate, 30 on a variable and the last 30% in the form of stock options, he said.
Another recruitment firm Matrix HR Solutions’ CEO Narendra Kala said: ”A CEO is placed at a high risk position, where delivery is very critical. He is the one answerable to the shareholders, he doesn’t have an option of going wrong. Only an extraordinary person having complex competencies can be a CEO, and for such a gem of a person the company has to spend.”
However, there are others who feel that the salaries of CEOs in India is still not at par with the global standards.
Indian CEOs are underpaid in comparison to their international counterparts, although slowly they are coming to a parity, Finesse PR’s HR Practice head Saurabh Azad said.
”Today when Indian economy is competing in the global market, the salaries will have to be in parity with the international salaries or else we will face the brain drain at the CEO level as well,” he added.