26 October, 2020

EVAsive Action Time?

How should the chief be paid? On performance? The market? Or the Murthy formula?

Namas Bhojani
EVAsive Action Time?
N R. Narayanamurthy is probably the most hated man in corporate boardrooms today. A couple of weeks ago, at a cii summit in New Delhi's Taj Palace, the Infosys chairman stirred a hornet's nest by saying that salaries of Indian CEOs (including the promoter-CEOs) were too high. He said that they should not be more than 15 to 25 times that of the lowest-paid worker in their companies. Immediately, there was a hushed silence. But later, there was a natural reaction from his fellow CEOs. Rahul Bajaj, chairman, Bajaj Auto, said that the formula is unfair if applied on the salary earned by peons in his organisation.

Well, that's a thought. Going by Murthy's formula, Bajaj shouldn't be earning more than Rs 15-25 lakh a year. His annual package (not counting the numerous perks that promoters enjoy) last year was just over Rs 55 lakh. Compared to that, Infosys itself follows the philosophy of paying its senior managers within limits. Murthy's 2001-02 salary of Rs 21 lakh fits his formula, although it does not include income from dividends earned on his holdings in the company and its...


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