The average CEO pay at India’s top listed companies has risen to Rs 10 crore a year, but still remains less than one-tenth of over Rs 100 crore median remuneration paid to their peers in the US.
The top executives of the country’s biggest bluechip companies, forming part of the stock market’s 30-share benchmark index Sensex, were paid an average remuneration of Rs 9.9 crore in the latest fiscal 2013-14 — up from about Rs 8.5 crore in the previous year.
In comparison, the average CEO pay for the companies forming part of the US stock market’s 30-share benchmark index DJIA (Dow Jones Industrial Average) stood at USD 17.5 million (Rs 105 crore) during the last year.
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The corresponding figures for the UK and Germany stood at about Rs 60 crore and Rs 50 crore, respectively, in 2013 — which are also significantly higher than the Indian average.
The average CEO pay for the Sensex companies would come down even further if the figures for the six PSU companies are taken into account, as their annual packages are considerably lower as they follow government regulations for salaries.
The average figure of Rs 10.06 crore for the fiscal year 2013-14 has been derived through an analysis of the latest pay disclosures so far made by the private sector Sensex companies in their latest annual reports.
However, the figures does not include the value of stocks owned by these persons, as also the other accrued benefits such as dividend payouts that may arise from share ownerships.
There are 24 private sector companies in the 30-share index, but six of them are yet to make public their 2013-14 annual reports. These six companies are Larsen and Toubro, Cipla, Bharti Airtel, Maruti, Sun Pharma and Hindalco.
Among these 18 Sensex companies taken into account, only four showed a decline in their CEO compensation for the latest fiscal, while the annual pay remained unchanged in one case — Reliance Industries’ Mukesh Ambani — at Rs 15 crore.
The pay package increased at TCS, Bajaj Auto, Axis Bank, ITC, Dr Reddy’s, Hero Motocorp, HDFC, HDFC Bank, ICICI Bank, Tata Power, Wipro, M&M and Tata Motors.
Those recording a decline in their annual CEO pay package included HUL, where Sanjiv Mehta took over the leadership baton from Nitin Paranjpe during middle of the fiscal in October 2013. Others with lower CEO pay during 2013-14 were Sesa Sterlite, Tata Steel and Infosys, whose outgoing CEO S D Shibulal was among the lowest paid in Sensex-club at just about Rs 16 lakh (down from Rs 65 lakh in previous fiscal).
Among those with higher pay packages, Hero Motocorp’s Managing Director and CEO Pawan Munjal got a total pay package of Rs 37.9 crore in 2013-14, up from Rs 32.8 crore in the previous fiscal. This included nearly Rs 3.5 crore as salary and Rs 29.8 crore as commission, among others.
In the US, technology major Oracle Corp’s Larry Ellison was the top-paid among blue-chip American firms with a pay package of USD 78.4 million (over Rs 470 crore), while Houston-based Cheniere Energy’s CEO Charif Souki topped the overall chart with remuneration of USD 142 million (over Rs 850 crore) in 2013.