Tata Sons’ executive chairperson N Chandrasekaran wrapped up the second consecutive year above the Rs 100 crore mark with a 20% hike, at Rs 135.3 crore, even as there was another C-Suite executive who took the pole position among the country’s highest paid professionals.
Abhay Bhutada, who took an early retirement from his role as managing director of non-banking finance company Poonawalla Fincorp three months ago, took home Rs 241 crore including his stock options for the year ended 31 March, 2024.
This is the highest compensation for any executive of a public listed company last year and is arguably the highest ever sum paid to a professional surpassing L&T veteran AM Naik's milestone of Rs 221.5 crore, five years ago.
Thierry Delaporte, who also stepped down as chief of Wipro early this year, snagged Rs 167 crore, more than double the figure of the previous year.
Adani Enterprises' Vinay Prakash too figures in the $10 million plus pay club last year.
Overall, six of the ten highest paid directors of public listed companies were professionals, a chart otherwise historically dominated by promoter directors, as per VCCircle analysis.
Echoing the trend, Ronesh Puri, MD at Executive Access, a talent acquisition and resourcing solutions firm, said, “professional pay packages are following global trends, being linked to company performance and stock success. About 60% of top CEO pay comes from stock options. India is experiencing a similar correction, with salaries now reflecting global standards.”
He added, “CEOs play a crucial role in company performance, making performance-based incentives a good strategy. As companies grow, the importance of professional managers increases, and owners recognise the need to bring in more professionals to enhance company capability and achieve better dividends.”
Basically, the value of stock options have gained in prominence over the years due to bulls runs in public markets.
Before L&T’s Naik set a new record, Tech Mahindra’s CP Gurnani and Vineet Nayyar had taken over Rs 170 crore each across different periods. In FY20, former HDFC Bank chief Aditya Puri pulled in Rs 180.4 crore as he encashed ESOPs.
The all-time chartbuster is PolicyBazaar co-founder Yashish Dahiya, who had created a new record that is unlikely to be broken anytime soon, with a compensation figure of Rs 613.8 crore in FY22.
Dahiya did not take any salary from PB Fintech, the company that runs the insurance marketplace PolicyBazaar, that year.
But he exercised stock options worth Rs 613 crore in FY22. In FY23 he again topped the charts with total compensation, largely accounted by ESOPs, pegged at Rs 317 crore. He has fallen off the charts since then.
Unlike the others, who were professionals and did not own a large chunk of the company, Dahiya is a co-founder and promoter of the insurtech company.
Historically, the highest cash remuneration among publicly listed companies for promoter-directors has hovered in the Rs 80-85 crore range. Much of this remuneration is via payment of ‘director fees’.
Among the promoter directors, the usual suspects figure in the list led by Hero MotoCorp’s Pawan Munjal and followed by Sun TV Network’s husband-wife duo Kalanithi Maran and Kavery Kalanithi; Naveen Jindal (who was redesignated as non-executive chairman last year) and his elder brother Sajjan Jindal; Neeraj Kanwar of Apollo Tyres; Murali K Divi of Divi’s Labs; Jayadev Galla of Amara Raja and HM Bangur of Shree Cement.
Rajiv Bajaj, Samir Kumar Modi, Harsh Pati Singhania and Arvind Poddar were others among promoter directors in the $5 million plus pay bracket.
The median remuneration for the top 10 highest paid executives, as per VCCircle analysis, remains at Rs 87.5 crore, against the average Rs 80-85 crore.
On the flip side, among the fifty highest paid executives in FY24, promoters account for two-third of the list.
To be sure, this is not an exhaustive list of the best paid executives in the country, as it comprises only listed companies.
Just like Tata Sons there are several large privately held companies that pay handsomely. In particular, those heading Indian units of large multinational companies earn several millions of dollars, partly via stock options of their parent companies.
Then there are large private equity and venture capital firms whose partners get a large chunk of ‘carry’ or profits above a threshold, albeit over a longer period.
