Sunil Jain: Forget Ambani, think Goenka

Most are focused on the salaries of the Ambani brothers when it comes to the ‘’vulgar’’ salaries Corporate Affairs Minister Salman Khurshid spoke of. The Ambanis, it turns out, take home very reasonable fractions of their companies’ sales/net profits — 0.03/0.23 per cent in the case of Mukesh and 0.22/0.63 per cent in the case of Anil. The Marans of Sun TV, Kalanithi and wife Kavery, in comparison, took home 7.36/16.96 per cent of sales/net profits (see graphic).

Looked at in these terms, India Inc’s highest-paid executives are a completely different lot from what the absolute numbers suggest. Prism Cement’s Managing Director Manoj Chhabra’s Rs 14.2 crore salary/commission in 2008-09 was a lot less than Mukesh Ambani’s Rs 44 crore for 2007-08, but it amounted to 14.8 per cent of the company’s net profits (2.3 per cent of net sales); Welspun India’s BK Goenka’s Rs 8.9 crore amounted to a whopping 33.9 per cent of net profits and joint managing director RR Mandawewala took took another 30.8 per cent. In terms of net sales, the toppers were Rick Bott and Rahul Dhir, who earned 307.1 and 191.5 per cent of net sales, but that’s explained by the company being just a few years old; ditto for Jignesh Shah of Financial Technologies who took home 4.49 per cent of net sales.

Manoj Chhabra of Prism Cement took home 2.26 per cent of net sales, Mukesh Arora of KLG Systel took home 3.1 per cent of net sales; Vivek Jain of Gujarat Fluorochem took home 1.98 per cent of net sales (6.1 per cent of net profits). In other words, just examining salaries in absolute terms is an irrelevant parameter.