How much should one CEO get as compensation? Are the amounts most of the CEOs get vulgarly excessive? Even prime minister expressed his views on the subject, sometime last year. Now Salman Khursid and Montek Singh Ahluwalia have expressed their views against the huge salaries and perks that many CEOs are drawing.
The concern has origin in USA. Even Obama expressed his concern. According to the media, the industry in US has reacted positively to his concern. In India some CEOs such as NR Narayana Murthy did also express his views against this. But overall, none in the management liked the views of the government to have constraint on CEO’s compensation. The CEOs, or why not call them, de-facto owners of the companies or groups, don’t want any governmental control on their compensation. Perhaps no one suggests that. But can they introduce some sort of self-constraint themselves? How the employees feel about the top 1% taking away the most of the cost of the company on employees’ compensation account? It is shameful for them.
India follows capitalist West system of management in every respect and so in the fixing the benefits of CEOs too. The lavishness of few ministers gets noticed and reported in media, but the misuses of the shareholders money by the CEOs are hardly reported. So is the case with the corruption by the executives in private sector. Though many of the CEOs might own similar properties as was reported for Satyam’s Raju, the media hardly knows it or dare to cover it.
Officially, the business leaders felt executive pay was an issue best left to shareholders to decide. But everyone knows how the annual meeting of the shareholders is managed and how the members of the board of directors function. Are the voices of common shareholders heard?
The whole country is happy to read the news that India has crossed the $100 billion milestone in FDI through equity since 2000 up to July this year testifying the country’s increasing profile as a safe and sound investment destination in the midst of the global financial crisis. But as much as 44% of the money came through the Mauritius route. Are we sure that the money coming from Mauritius is not the Indian money re-entering the country in official way.
Let the CEOs listen to the warning bells. They may be able to manage for all the differentials they are living with as their right for some more time, but pretty soon they will have to change or the people working for them will force them to change.
I wish the media expose more and more of the many aspects of the bad and corrupt practices in the private sectors. Only hope may be in the educated executives from B-school’s coming up the ladder in the organization to find a sustainable model for compensation and certain acceptable norms to bring in some amount of equity depending on the responsibility.
दृष्टिकोण - Indra's Viewpoint 