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Company heads take home a bounty, but not the average employee

businesspaper Updated: Oct 12, 2016 12:05 IST

NEW DELHI: It pays more to beat the top, especially in India.

An HT analysis shows that around 25 highest-paid executives of BSE-listed companies in 2015-16, on an average, earned 899 times more than the median pay of employees of their respective companies. Median refers to the middle number in a set.

For instance, Vineet Nayar, former executive vice-chairman of Tech Mahindra and the highest paid executive last fiscal (2015-16), earned 3,438.5 times the median salary of employees in the company. The compensation of Jayadev Galla, vice-chairman and MD of Amara Raja Batteries, was 2,448 times the median pay. Onkar Kanwar, CMD, Apollo Tyres, and DB Gupta, chairman of Lupin, earned 1,425 and 1,317 times more of what a mid-level employee would earn in their respective companies.

While top-level executives’ salaries are going up, junior and mid level pay remain stagnant. Out of the 25 executives analysed, except two, all others saw their ratios increase from last year.

Vineet Nayyar’s pay ratio to the median salary of Tech Mahindra’s employees rose to 3,438.5 times from 2,114.8 times, while the median salary saw a drop of 8% in the last one year. Likewise, DB Gupta’s pay cheque went up from ₹37.58 crore to ₹44.78 crore, and vice-chairman Kamal Sharma’s compensation rose from ₹16.6 crore to ₹25.7 crore. The median pay for Lupin was only up 6.5%. The median pay ratio for L&T’s Naik also rose to 1,004 times last fiscal from 454 times in 2014-15. In contrast, L&T’s median pay increased only 9.35% to ₹6.6 lakh.

There are also few exceptions where the pay divide is not that steep. Sudhir Mehta, chairman of Torrent Pharma, took home a salary of ₹100 crore in 2015-16, but his pay is 278.6 times that of the median pay of his employees, a small to the rest. Similarly, Bharti Airtel chairman Sunil Bharti Mittal and Ashok Leyland chairman DG Hinduja earned 347.5 times and 407.3 times of the median pay, respectively.

“The salaries of top executives are now mostly revised every alternate year. Earlier they were revised with a gap of three to five years. So the gap is widening” said Amit Tandon, MD of Institutional investor advisory services( Ii AS ), a proxy advisory firm.