New Delhi: CEOs of sick public sector units (PSUs) are all set to receive huge pay hikes! Though the move by the government may look funny, the idea behind is to retain them and offer additional incentives for turning around the sick companies. Extension of tenure, post-retirement medical benefits and additional gratuity are also being considered.

A report by The Economic Times says that the second PSU pay revision committee, headed by former Supreme Court judge M Jagannadha Rao, made a strong case for increasing the salary of PSU employees and put them at par with their private sector counterparts, who obviously take home more pay than the formers.

"We have earlier suggested the department of public enterprises for giving extra benefits to the CEOs of sick PSUs. This move will not only help getting better professionals for running sick companies but also retain performing CEOs," said an official from Board of Reconstruction of Public Enterprises (BRPSE). "The profit making PSUs get their due share sooner than later, however, it is pertinent that there should be extra incentive for loss-making PSUs also," the official added.

Other soaps included in the proposal are longer tenures and extension of retirement age beyond 60 years of age. Currently, a PSU CEO's tenure is of five years and the retirement age is 60. "If the CEO is performing well and which is visible in the company's result, a tenure extension can be granted even if the CEO has reached the retirement age," a government official said. Currently, the CMD of a navratna company gets a salary of around Rs 10 lakh along with other benefits.

The second pay revision committee has recommended that variable pay or performance-related pay (PRP) should be made an integral part of the compensation package which should be directly linked to the profits of the CPSE.