Pawan Munjal, Managing Director of Hero MotoCorp, was the highest paid director with a remuneration of Rs.43.91 crore during the last financial year ending March, while Kumar Mangalam Birla was paid Rs.40.5 crore for being a director in four companies, according to InGovern, a proxy advisory firm, which collated data related to the pay-ratio disclosures made by companies that are part of the Nifty index of the National Stock Exchange.
The average salary of an executive director in the top 50 listed companies of India was Rs.nine crore while the average median employee remuneration was only Rs.5.87 lakh. The Nifty index comprises of the largest 50 listed Indian companies.
There were a total of 11 directors whose remuneration exceeded 400 times the median employee pay of their companies. These include three directors each of Hero MotoCorp and Lupin and one each of Hindalco, L&T, Cipla, ITC and TCS.
“ Bosch, Maruti Suzuki and Bajaj Auto have not made the required disclosures in their respective annual reports for 2014-15. ”
A total of 10 directors received their pay in excess of Rs.19 crore in the financial year ended 31 March, 2015, according to InGovern. It analysed the pay of 95 directors and most of the highest-paid directors of Nifty companies were promoter entities. Mr Birla is the only non-executive director among the 10 highest paid directors.
Hindalco’s director D. Bhattacharya took an annual remuneration of Rs.21.59 crore in 2014-15, which was 2.33 per cent of the net profit of the company in that year. There were seven more directors whose pay was more than one per cent of the standalone profits of the company.
As per Section 197 of the Companies Act 2013, all companies except public sector undertakings are required to disclose director and key management personnel pay-ratio disclosures in their annual reports. According to InGovern, 34 of the 50 companies that are part of the Nifty have made the required disclosures.
The government, through a notification issued in June 2015, exempted state-owned corporations from making such disclosures, according to InGovern.
There are 10 such state-owned undertakings in Nifty, including ONGC, BPCL, Coal India, State Bank of India and NTPC among others.
Bosch, Maruti Suzuki and Bajaj Auto have not made the required disclosures in their respective annual reports for 2014-15, the two auto majors have said that the details would be made available to the shareholders on request.
