London: The world’s largest spirits maker Diageo Plc has proposed an annual pay package of up to £10.9 million (about Rs105 crore) for its newly appointed, Indian-origin, CEO Ivan Menezes.

Menezes, who has been with UK-headquartered Diageo for about 13 years, was paid total remuneration of £7.8 million (Rs75 crore) in the last financial year ended 30 June 2013 when he served as chief operating officer.

Upon his promotion as CEO with effect from 1 July, he has been given an 8.6% hike in base salary to £1 million (about Rs9.6 crore) and would be entitled to further benefits totalling up to £9.9 million (Rs95 crore) a year, Diageo said in its latest annual regulatory filing.

Diageo, which owns brands like Johnnie Walker, Smirnoff, Baileys and Guinness, recently acquired a significant stake in India’s leading liquor firm United Spirits from Vijay Mallya- led UB group in a deal worth over $2 billion.

53-year-old Menezes, who studied at premier Indian educational institutions like St Stephen’s College and IIM-Ahmedabad besides Kellogg School of Management in the US, is said to have been instrumental in the United Spirits deal.

Prior to joining Diageo, Menezes held senior positions with giants like Nestle, Booz Allen Hamilton and Whirlpool.

While Diageo said that “Menezes’ salary has been positioned below median to reflect the fact that he is new to the chief executive role", his total package is much higher than the average salary earned by CEOs in India and abroad.

As per a latest managerial remuneration report by the Institutional Investors Advisory Services (IIAS) last month, the average CEO salary for India’s biggest 500 companies in the last fiscal stood at Rs3.6 crore, while the sale for the biggest 500 companies in the US was Rs28 crore. As Diageo CEO, Menezes would get a base salary of £1 million, and would be eligible for awards under the company’s annual incentive plan (AIP), performance share plan (PSP), senior executive share option plan (SESOP) and pension payments.

Under the AIP, he can get up to 100% of salary for “on-target performance" and a maximum of 200% of salary payable for outstanding performance—which could take this component to up to £2 million.

The maximum annual award under PSP can be 375% of the base salary (up to £3.75 million), while Menezes would also be eligible for a maximum annual award of 375% of base salary under SESOP (up to $3.75 million).

Besides, Diageo would make an annual contribution of 40% of his base salary to an executive retirement plan, taking his total package to up to £10.9 million.

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