While automation and job loss have been creating quite a sleeplessness night for the employees in the companies all over, and employees are sceptical to even ask for a raise, an analysis of remuneration disclosures made by the top-listed companies shows that the pay packages of top executives remained high and rose further at most private sectors firms during 2016-17.
But, median employee remuneration fell or stayed the same during the last fiscal. And the ratio of the CEOs or Chairmen to employee remuneration was as high as 1200 times, according to the report published by the news agency PTI.
Under the directions of the market regulator SEBI, a company needs to disclose the pay package of their top executives. As per the rules, the remuneration payable to any one MD or whole-time Director or Manager, cannot exceed 5% of the net profit of the company. If there is more than one such director, the remuneration cannot exceed 10% of the net profit to all such directors and managers taken together.
The public-sector companies show a totally different picture with their top executives getting salaries of just about 3-4 times of their median employee remunerations.
Six Sensex companies have reported some decline in this ratio and these include Wipro (down from 260 times to 259 times), Infosys (283 times), Dr Reddy’s Lab (from 312 times to 233 times) and Hero MotoCorp (from 755 times to 731 times).
According to the PTI report, TCS saw the ratio between top-paid executive pay and the median employee remuneration rise to 515 times (from 460 times in previous year), while the same for Lupin stood at 1,263-times (though down from 1,317 times) for Chairman. The ratio for the CEO at Lupin was much lower at 217-times.
At HDFC Ltd, the ratio for the CEO Keki Mistry rose from 88 times to 92 times, while the same for Chairman Deepak Parekh was much less at 17 times. Among the companies which are yet to report their latest numbers, Larsen and Toubro had disclosed a very high ratio of 1004-times for the fiscal 2005-16.
At ITC, the ratio rose from 427 to 508 times in case of YC Deveshwar, who has now given up his top executive role, but the ratio for the current executive chief was much lesser at 59 times. Deveshwar’s total package rose by 58% to Rs21.16 crore, including all the benefits.
At Adani Ports, the ratio was down to 42 times in case of Gautam Adani (from 48 times), while the ratio was much higher at 169-times for another whole-time Director.
Among banks, the ratio was highest for HDFC Bank’s CEO Aditya Puri (whose pay package rose by 20% to over Rs 10 crore) where it rose from 179 to 187 times. Kotak Mahindra Bank saw the ratio rise from 42 to 48, ICICI from 100 to 112 times and Axis Bank from 72 times to 78 times.
Other companies that saw an increase in the ratio included Bharti Airtel (to 366-times in 2016-17), Cipla (416 times), M&M (108 times), Tata Steel (94 times) and HUL (138 times).
Among the 30 Sensex firms, at least 15 have already disclosed an increase in the ratio of top executive pay with that of the median employee remuneration for 2016-17.
The companies with an increase of over 10% for median employee remuneration were a few and included Kotak Mahindra Bank, Adani Ports, HDFC Bank, HDFC Ltd and Lupin. Dr Reddy’s Lab was among the very few to see a decline in the CEO pay, while it was unchanged for RIL and Adani Ports.
The companies having seen a rise in the top executive pay included Wipro, TCS, Kotak Mahindra Bank, Axis Bank, Bajaj Auto, Tata Steel, M&M, Hero Motocorp, Lupin and Bharti Airtel. The overall key management pay rose significantly for Bharti Airtel, HDFC Bank, HDFC Ltd, TCS and Asian Paints.