 "Former bankers, bureaucrats top-earning independent directors")
Six years ago, in an interview to the Economic Times, O P Bhatt, then the chief of the State Bank of India had lamented that he was the lowest paid chief executive officer on the Fortune 500 list.
But, today he is among the country’s top-earning independent directors. For the year ended March 2016, Bhatt earned Rs 2.91 crore from his three independent directorships. That was over 10 times what he took home in his last year as the public sector bank’s chairman.
According to data from Prime Database, the top 50 independent directors earned Rs 85.81 crore in FY16, a marginal increase from Rs 84.62 crore in FY15. The average earning of top 50 independent directors inched up to Rs 1.71 crore from Rs 1.69 crore in the previous year.
The analysis was based on 1,442 NSE-listed companies that had filed their annual reports last week. In case an independent director also holds one or more whole-time directorship positions, only the remuneration earned as an independent director has been considered for the purpose of this analysis.
Of Bhatt’s earnings, Rs 22.9 lakh came as sitting fee, while Rs 2.68 crore came in the form of commission, according to data from Prime Database. Bhatt served as independent director on Tata Consultancy Services, Tata Steel and Hindustan Unilever. His earnings grew by 5.74 per cent during the year, despite dropping out of the board of public sector explorer Oil and Natural Gas Corporation.
At Rs 97.13 lakh per board seat, Bhatt’s average earning was the best among independent directors who were on two or more boards. During Bhatt’s tenure, SBI had extended $1 billion credit line to Tata Steel’s UK unit for the acquisition of Corus in 2007.
Only independent director to have earned more than Bhatt at gross level was Bhatt’s colleague on the TCS board, Aman Mehta. The former HSBC CEO earned Rs 3.69 crore, but had to sit on five boards for this. He earned an average of Rs 73.98 lakh per firm, data showed.
Unilever veteran Ashok Shekar Ganguly came third, averaging Rs 73.51 lakh across his two board positions in Wipro and Dr Reddy’s Labs. Former McKinsey consultant Anupam Puri (Rs 72.24 lakh) and senior banker Kalpana Morparia (Rs 67.75 lakh) completed the top-five list of highest averages.
Adil Zainulbhai (Rs 2.55 crore, 4 boards) and retired bureaucrat Vijay Kelkar (Rs 2.53 crore, six boards) completed the top-five list in terms of total earnings.
In all, 12 independent directors clocked earnings of Rs 2 crore or more in FY 16. Others in the list are senior journalist Omkar Goswami, audit professional Shailesh Haribhakti, scientist R A Mashalkar, former Sebi chairman M Damodaran, Subodh Bhargava, Anupam Puri and William Arthur Owens.
Of these Owens, a former US Navy commander, earned his entire Rs 2 crore earning for the year from his Wipro board seat. Others with high-paying single board seats are former RBI deputy governor K C Chakrabarty of Indiabulls Housing Finance (Rs 1.9 crore) and Ron Sommer of TCS (Rs 1.74 core).
