Sucheta Dalal :CEO Compensation
Sucheta Dalal

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CEO Compensation  

April 25, 2009


Obscene CEO compensation is a Western disease that spread rapidly in India during the recent boom. In fact, Dr Manmohan Singh caused a huge uproar in 2007 when he echoed global concerns about CEO salaries soaring in tandem with the Sensex. Since then, the excess that originated in the US and spread through the Western world has led to a global financial crisis. The pay and perks of corporate honchos in the US have continued to rise even in 2008. It is the same in India. CEOs of Indian companies have awarded themselves and their family members inducted as directors hefty pay packages. Fat pay cheques are only one of the four forms of compensation that Indian CEOs derive from companies. They also earn from dividends on shareholding, pass on all personal expenses to the company and benefit from the appreciation of their shares (including the price manipulation that is fairly rampant). Among the 10 CEOs earning the fattest pay cheques are Mukesh Ambani of Reliance and PRR Rajha of Madras Cements at the top two slots, followed by the Maran brothers of Sun TV (taking home $5.7million each). The list also includes Brijmohan Lall Munjal and Pawan Munjal of Hero Honda and Sajjan Jindal (whose entire group of companies had benefited hugely through concessions and write-offs by banks as part of a corporate debt-restructuring exercise). Funnily, investors are not even complaining. They seem happy enough that most of these fat cats have suffered a big fall in their net worth because of the collapse of their share prices.

-- Sucheta Dalal