Fat CEO salaries come under the gaze of shareholders and boards
Amid post-pandemic disruptions, rising inflation, geopolitical tensions and a weakening rupee, the million-dollar salary club consisting CEO/CXOs with salary over Rs. 7.8 crore witnessed a 37% increase in FY22. The year saw the entry of 46 new members to the club (from 125 to 171), a study conducted for TOI by EMA Partners, a global executive advisory firm, showed. In the FY21 study, membership in this club had shrunk by 17% (from 150 to 125). The positive outcome in FY22 was perhaps an indication of the turnaround after a two-year hiatus due to the pandemic.
Several studies have also found a positive correlation between company performance and CEO compensation, indicating that bosses are typically rewarded for an improvement in earnings.
However, Indian corporate boards and their nomination and remuneration committees are poring over the compensation increases of CEOs at a time when macroeconomic headwinds, geopolitical risks, and stubborn inflation loom large on the horizon.
In March this year, public shareholders of Max Financial Services rejected a special resolution that proposed an annual remuneration of Rs. 3 crore to its chairman Analjit Singh in FY24. Around 63% of the institutional investors and 99% of the retail investors voted against the resolution.
