CEOs of loss gripped firms rake 27 percent hike

By siliconindia   |   Monday, 01 June 2009, 21:49 IST   |    7 Comments
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CEOs of loss gripped firms rake 27 percent hike
New Delhi: While companies are relentlessly slashing jobs as a retrenchment measure amidst declining profits, the CEOs are raking hikes up to 27 percent. As per a study, four out of every five CEOs covered by the study got a pay hike, even as half of the companies reported lower profits or made losses in 2008 over the previous year. The findings are based on a study conducted by Economic Times, which surveyed the salaries of 50 CEOs. The survey scanned the CEOs of public-listed companies, who enjoyed compensation of more than 1 crore in 2008. The total pay packet of CEOs include salary, sitting fees as directors, commissions and certain other perks, but excludes stock options and other allowances such as gratuity. "Although pay for performance as an issue is becoming important in India. However, we haven't seen top management taking any drastic pay cut, as Indian companies' financial performance has not deteriorated to the same extent as those of their global counterparts," said Atul Vohra, Managing Partner of headhunting firm Transearch. Among the top 10 highest paid CEOs in 2007, the study scanned Malvinder Singh, who had recently stepped down as the CMD and CEO of India's largest drug maker Ranbaxy Laboratories. Singh saw a 21 percent hike in remuneration from 19.6 crore in 2007 to 23.7 crore in 2008, while the company swung from a net profit of 774.58 crore in 2007 to a net loss of 951 crore in 2008. The year ended December 2008 saw his salary and allowances more than double to 19.29 crore and his retiral benefits jumped to 4.3 crore, almost nine times from the previous year. Other prominent CEOs who took home higher pay packets despite deteriorating net profits include cement major ACC's Managing Director Sumit Banerjee, Pfizer's Kewal Handa, Ambuja Cements' AL Kapur, MRF's KM Mammen, Thomas Cook's Madhav Menon and Mawana Sugar's Siddharth Shriram.