New Delhi: The economic downturn may have eaten into the profits of corporate India as also jobs and salaries of the employees, but the top management seems to have remained unaffected as its average payout nearly doubled in the last fiscal.
The average remuneration paid to the top management executives and board members rose to nearly Rs2 lakh a month during 2008-09 from about Rs1 lakh during the previous fiscal.
At the same time, the number of companies paying an annual remuneration in excess of Rs1 crore also seems to have doubled during the fiscal, according to an analysis of top-management payouts during the past two years.
During 2008-09, one in every three companies paid more than Rs1 crore to one or more of its top management executives or directors. The ratio was much wider at one in seven during the previous fiscal 2007-08.
The surge in the prevalence of ‘crorepati’ executives as also average top-management remuneration among Indian firms comes in the midst of the annual profit dipping substantially for a large number of companies as also large-scale layoffs, pay cuts or lesser pay hikes announced by the companies as a result of the global economic downturn.
So far, 285 companies have released their latest fiscal annual reports disclosing the payout for top-management and directors, out of which 76 companies have paid annual remuneration in excess of Rs1 crore to one or more of their top-management executives.
Interestingly, there are no government-run companies among those paying remuneration in excess of Rs1 crore.
In comparision, 333 companies, out of a total of about 2,400, had paid an annual remuneration exceeding Rs1 crore to one or more top management executives or directors in the previous fiscal.
So far, the companies have disclosed an annual remuneration of more than Rs1 crore for a total of 136 executives for the latest fiscal, but the number is expected to swell further considerably as only about one-tenth of the companies have disclosed such information.
Besides, only a few large-cap companies have so far disclosed the information. Of the BSE-100 companies, the 100 largest companies in the country, only 23 have disclosed such information for 2008-09, wherein 39 executives from 16 firms have been paid annual remuneration exceeding Rs1 crore.
During 2007-08, a total of 594 executives had been paid a remuneration of more than Rs1 crore. These executives were paid a total of Rs1,803 crore, resulting in an average payout of over Rs1 crore.
The average payout for such executives, however, declined to about Rs2.6 crore during the latest fiscal, with a total payout of about Rs358 crore so far.
However, the average payout for all the top-management executives and directors at Indian companies, including those having been paid less than Rs1 crore, rose to about Rs47 lakh from close to Rs24 lakh in the previous fiscal. This results in the average monthly payout doubling from about Rs1 lakh to Rs2 lakh.
However, the details for the latest fiscal are available for only about 2,400 executives, who were paid a total of about Rs500 crore, as against about 24,000 in the previous fiscal with a total payout of close to Rs2,700 crore.
The average also takes into account executives and board members who do not take remuneration from one particular company, mostly because they are also on the board or in the management team of some other group company where they are paid some remuneration. Such people account for nearly half the total number of top-management executives or directors.
Excluding such persons also, the average payout nearly doubled to about Rs50 lakh from close to Rs25 lakh in the previous fiscal.