EDITORIAL

STREET SMART
The market’s incessant rise has encouraged companies to raise funds from the public

URGE TO SPLURGE
Have money, will spend seems to be the motto of the elite

SHAKERS BUT NOT MARKET MOVERS
The ones who did not have to tap the market to get the numbers

BILLIONAIRE CLUB
A definitive list of India Inc’s richest

HIGHEST PAY PACKETS
List of the best paymasters

METHODOLOGY AND INDEX
How we estimated wealth and earnings of billionaires

BILLIONAIRE CLUB 2006
BILLIONAIRE CLUB 2005

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“Most companies in India would like to retain their top talent, as growth is their predominant concern. That probably explains the compensation packages,” says Sadeesh Raghavan, managing partner, India domestic business, Accenture. That loyalty has its rewards is probably true in the Indian context.

Only 38 of the 576 executives from the listed companies had joined their jobs in the last one year. And of the 134 new entrants in the crorepati list, only 28 were from newly-listed companies. Among the new entrants were Rajiv Singh, vice chairman of DLF (Rs 7.92 crore), Ravinder Jain, managing director of Panacea Biotec (Rs 6.69 crore), J C Sharma, managing director of Sobha Developers (Rs 5.14 crore), T C Goyal, managing director, DLF (Rs 4.56 crore), P N C Menon, chairman, Sobha Developers (Rs 3.26 crore) and Rohtas Goel, chairman and managing director of Omaxe (Rs 2.55 crore).

RRAJIV SINGH, DLF’s vice chairman, gets a pay packet of Rs 7.92 crore

Which sectors paid executives well? Fifty of the crorepati executives belonged to pharmaceuticals, followed by 44 from information technology, 41 from construction, 29 from textiles, 22 from steel, 21 from hotel, 20 from automobiles, 19 from auto-ancillaries, 14 from engineering and 13 each from banking, cement and personal care products. Point to note: just one sector – infotech belonged to the new economy. But that does not mean new economy does not pay its executives well, warn experts.

Many companies in sunrise sectors such as consulting, luxury retail, telecom and real estate are not listed. If you include unlisted companies, the number of crorepati executives could well be around 500 executives. In the top five telecom companies, for instance, more than 20 executives earn more than Rs 1 crore.

“Every year there are spikes in compensation because of new boom areas. This year it’s fashion and luxury retail,” Suresh says, adding that “listed companies are not necessarily a microcosm of what happens in the corporate world”. Reliance Industries Chairman and MD Mukesh Ambani continued to lead the pack of highly paid executives. With an annual package of Rs 30.46 crore in 2006-07, his pay was up by about 25 per cent from Rs 24.51 crore in the previous financial year. “The share of salary as an element of the overall compensation plan is dwindling,” says Suresh. He says that the other forms of compensation such as perquisites, variable performance bonus, long-term wealth creation plans (deferred bonus), share of the profits and stock options are increasingly gaining importance.

BRIAN TEMPEST, executive vice chairman, Ranbaxy Laboratories, is one of the few professionals who makes it to the top 60

Even in Ambani’s case, salary and perquisites formed only Rs 1.08 crore of his annual package. He received Rs 29.06 crore as commission. If you include stock options, the pay packets could be even more staggering. A Business Standard study earlier this year indicated that top executives in 40 leading companies have received Rs 12,000 crore worth of equity shares under employee stock options till March 2006. That could put top executives in another league altogether. •

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Business Standard • December 2007