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Salaries unlimited Who got the biggest raises? Which company was the most generous? Prasad Sangameshwaran and Deepak Korgaonkar find out Sheldon Adelson earns close to $1 million an hour. And he’s not the richest man in the world. In fact, Adelson is not even the richest American. With a personal fortune of $20.5 billion, the CEO of the Las Vegas Sands Corporation is in the No. 3 slot in the list of America’s 400 richest. Ahead of him are Bill Gates ($53 billion) and Warren Buffett ($46 billion). By comparison, India’s super rich have miles to go. The 407 heads of companies on the Billionaires’ List collectively earned Rs 1,660 crore – $360.87 million – in 2005-06. That’s peanuts compared to Messrs Gates, Buffett and Adelson. Still, it is a handsome 22 per cent leap from the previous year’s Rs 1,360 crore, earned by the CEOs. The number of CEOs who earn more than Rs 1 crore a year has also gone up sharply, from 267 to 407, while their pay cheques went up from Rs 622 crore to Rs 872 crore. Of course, the list could be much longer – some HR consultants say it would more than double to somewhere between 800 and 1,000 people – if you include senior executives from unlisted companies, including the big international firms, management consultancies and foreign banks, investment bankers, unlisted retail billionaires and sundry others. Consultants estimate that the top salaries in sectors like retail and management consulting would be between Rs 4 crore and Rs 6 crore, compared to the average of Rs 2.5 crore for those in listed companies. Comparisons with salaries in the US aren’t entirely appropriate, the consultants point out, because the business context is different. But going by this year’s results, India Inc is narrowing the gap between salaries here and pay packages in the rest of the world. “The global trend for top managers is consistent with Indian salaries. Barring the US, where compensation tends to be very high, Indian salaries would be comparable to those in countries such as China, Brazil, Europe and Australia,” says Gaurav Lahiri, operations manager, Hay Group, a management consulting firm. Adds Purvi Sheth, vice-president at Shilputsi, “From a global perspective, India compares well at some senior and top-management levels.” Not just that, Indian salaries, as a whole, are growing faster than those of other countries in the Asia Pacific. According to Hewitt’s salary increase study for Asia Pacific in 2005-06, the highest salary increase in the region was in India where salaries increased across the board by 13.9 per cent in 2005. In 2006, Hewitt expects the trend to continue, with a 13.8 per cent increase. In comparison, Japan was the most dismal on the salary front, with only a 2.7 per cent hike. But amidst the excitement over soaring salaries, here’s a sobering thought: although the pay packages of India’s top managers increased substantially last year, this accounted for just 2 per cent of India Inc’s net profit and 0.20 per cent of net sales for three years in a row. It is also interesting that only 41 companies in India Inc have three or more executives earning more than Rs 1 crore a year. Bharti Airtel emerged the most generous, with 15 executives in that salary bracket. Larsen & Toubro was next, with eight, followed by Hero Honda Motors’ seven. Gujarat Ambuja and Nagarjuna Construction notched up five each.
Mukesh Ambani, chairman and managing director of Reliance Industries, topped the list with an annual compensation package of Rs 24.51 crore in 2005-06, up from Rs 21.70 crore in the previous year. Ambani received Rs 23.43 crore by way of commission, and Rs 1.08 crore as salary and perquisites.
The multinational companies operating in India are not far behind. While Martial G Rolland, who was appointed CMD of Nestle India last December, was the highest paid professional manager in MNCs with a Rs 3.58 crore pay package, two other CEOs got over Rs 2 crore each. They are: ITC Chairman Y C Deveshwar (Rs 2.57 crore) and Colgate-Palmolive MD Roger D Calmeyer (Rs 2.14 crore). Three
others who closed in on the Rs 2 crore mark are: Gillette India
MD Zubair Ahmed (Rs 1.88 crore), i-flex Solutions CEO Deepak Ghaisas
(Rs 1.84 crore), Avaya Global Vice-Chairman & MD Niru Mehta
(Rs 1.78 crore) and Hindustan Lever Vice Chairman M K Sharma (Rs1.70
crore).• HOME Business Standard • October 2006 |
There
were no pure-professional managers among the 17 people who earned
Rs 10 crore or more a year – that list comprises only promoters.
Among the new entrants in this category are Navin Jindal, executive
vice-chairman and managing director of JSW Steel (Rs 13.54 crore),
Sunil Mittal of Bharti Airtel (Rs 12.68 crore), Harish Kumar Mittal
and Atul J Agarwal of Mercator (Rs 10.07 crore), Kalanithi Maran,
chairman and managing director of Sun TV (Rs 11.13 crore), and his
wife Kavery Kalanithi, joint managing director (Rs 10.26 crore).
Hero
Honda Chairman Brijmohan Lall Munjal and Managing Director Pawan
Munjal took home Rs 15.58 crore and Rs 15.22 crore, respectively.
DSP Merrill Lynch Chairman Hemendra Kothari was at No 5, with an
annual compensation of Rs 14.60 crore. The list also includes two
of Hero Honda’s overseas directors, Miki Yamamoto and Takao
Eguchi, who were paid Rs 12.64 crore and Rs 12.55 crore, respectively.
For their part, the pure-professional managers didn’t fare
badly. 
Cipla
Joint Managing Director Amar Lulla took home Rs 7.33 crore last
year, an increase of almost Rs 2 crore over the previous year. He
is followed by DSP Merrill Lynch Joint Managing Director Amit Chandra,
who earned Rs 6.36 crore. Reliance Industries Executive Directors
Hital R Meswani and Nikhil R Meswani are next on the list, with
Rs 6.25 crore each. With an annual salary of Rs 5.09 crore, Ashok
Kumar Goel of Essel Propack ranked fifth.
Who
got the biggest raises? Mercator Lines’ Mittal and Agarwal
top this list: from Rs 2.88 crore each in 2004-05, their salaries
jumped 249 per cent to Rs 10.07 crore last year. Close on their
heels is JSW’s Jindal, who got a 248 per cent hike in salary,
from Rs 3.89 crore to Rs 13.54 crore. Among the companies that more
than doubled the salaries of their top management are Bajaj Auto,
Dr Reddy’s Laboratories, Nagarjuna Construction and Madras
Cement.