Top executives took home bigger salaries | Economic Times

Captains of India Inc took home about 13% more in average salary last year despite the pandemic, as companies sought to retain their managing directors and chief executives to steer them through the extraordinarily difficult times and unprecedented disruption in the business environment.The double-digit pay increase in fiscal 2021 compares with a 3% rise in FY20 when the nationwide lockdown had affected the last ten days of the fiscal year and the wallets of CEOs as many boards decided to freeze or cut the bonus and variable pay, thus taking away a large chunk from the salary of top executives.However, this March-end, those at the helm of companies took home fatter pay cheques with the average pay of MDs and CEOs at ₹10.41 crore compared with ₹9.22 crore in FY20, according to an ET analysis 80 of the BSE 200 companies for which data is available and comparable. The calculation, based on data from annual reports, excludes promoters.85440149The companies include sector frontliners such as Infosys, Tata Consultancy Services, Tata Steel, Larsen & Toubro, Godrej Properties and Ashok Leyland.“The stock markets have done well and most of the industry sectors have given good returns to shareholders. This coupled with demand revival towards the latter half of last fiscal, robust corporate earnings, and strong private equity market have led to a rise in CEO compensation,” said Harsh Goenka, chairman of the RPG Group.The CEO remuneration data includes salary, bonus, value of perquisites, commission and other benefits. Increasing C-suite churn over the last one year — with many CEOs moving to startups and new age businesses that offer huge wealth creation opportunities — also prompted many large companies to open their purse strings to retain the top leaders suited for the current business environment.“The startup ecosystem is booming with no constraints to pay compensation. Large companies want to hold on to their talent by rewarding them ,” said Goenka.Nomination and remuneration committee members on company boards are of the view that CEOs had the most daunting and challenging task of navigating their companies and people through one of the most turbulent times and there was no hesitation among board members in rewarding them.“We have discussed that when performance of the company has peaked despite the pandemic, a great deal of the credit should go to the CEOs who bore the brunt of the upheaval and led the way by changing tactics and re-strategising, innovating as well as motivating employees to be able to perform under the extraordinary circumstances,” said Shailesh Haribhakti, chairman of audit and accounting firm Haribhakti & Co and an independent director at several Indian companies. “So, we were happy to grant a significant increase in CEO salaries,” he said.Arun Duggal, non-executive chairman of ratings firm Icra and an independent director, said: “CEOs had the most difficult test of dealing with this unprecedented disruption in business. Their job has been much more difficult than in normal times for which they were rewarded.” Shareholders were well rewarded and the stocks have done well, which also contributed to many CEOs taking home more, he said.Compensation experts said stronger variable payouts at the end of FY21 compared to a year earlier contributed to the significant jump in the salaries. “The end of FY21 has seen a much stronger performance and a stronger variable pay and long-term incentive award,” said Rajul Mathur, consulting leader India, talent & rewards at global advisory firm Willis Towers Watson.