Decked in denim

Many thought that tycoon Naresh Goyal of Jet Airways had managed a coup of sorts by slashing ticket prices and managing to attract even railway passengers. But Steve Forte, CEO of Jet Airways, obviously does not share the same view. And this just might be the reason behind Jet Airways reluctantly hiking its ticket prices by 10 percent. But is it bolting a denuded stable? Forte after all, was known a force behind the success of Jet Airways. He was strongly against offering discounts to run the airline. Goyal may have been giving in to pressure, since all other airlines were offering discounts. But that it led to Forte’s exit might indeed spell a air-pocket for the airline. Jet Airways claims that Forte has decided to be with his family in the US and therefore the resignation. Of course, Goyal is putting up a brave front and not appointing a successor to Forte and has decided to directly supervise the functioning of Jet himself. But one can’t help wondering whether Goyal has actually lost one valuable part of the Jet stable. Of course while this tycoon sweats it out, another seems to be quite happy with the recent turn of events. Sunil Arora is sitting happy now that the private airlines have no choice but to hike prices. The slashing of ticket prices had played havoc with Indian Airlines passenger traffic. So Arora can breathe easy for now.

Getting away with booty

Tycoons are making news, but not in the way they’d like to. There’s a debate brewing and it’s getting stronger by the minute. Pick up any paper or switch on any news channel and the topic of discussion is the wild paypackets which today’s tycoons are demanding. Ever since GE hit the headlines with the retirement benefits its been doling out to its big boss, Indian tycoons have been quaking in their shoes. But how does this effect our Indian tycoons? Some have been playing the same game you see. Russi Mody upon retirement was rumoured to have bid for homes in various cities along with other perks. And this unfortunately is just one of the well-publicised cases we know of. Infosys chief, Narayana Murthy recently burst the bubble on Indian tycoons by stating that Indian tycoons are paid way too much. Tycoons quaked again when a study by XLRI was found that in the past 5 years, CEO pay in India has risen faster than profits, average employee pay, return on capital employed and even return on equity. Indian companies have also, apparently made an art of hiding CEO and tycoon compensation. But our tycoons can rest easy for a while. Despite the negative publicity that they’ve gathered now that their salaries are under the microscope, it seems they just might escape with their booty. After all, till salary details are exposed in detail and one knows exactly what a CEO is costing the company, no steps can be taken against irrational salaries and perks.

(Dilip Cherian, runs a public affairs firm Perfect Relations. He is an economy watcher and tycoon tracker. None of the people he writes about are his clients. Your insider tales are welcome at dilipcherian@now-india.net.in)