New York:
Small Headline: No recession for top-paid CEO in US
City: New York
ByLine: Press Trust of India
The US has entered 17th straight month of recession, but the pay package of its highest-paid CEO exceeds $100 million (over Rs 500 crore) -- a figure more than 10 times that of his counterpart in the country of his birth, where economy is still growing at a decent rate.
America's top earning business head, mobile phone maker Motorola's co-CEO Sanjay Jha, who got a package of $104 million in 2008, happens to be an India-born person.
In comparison, India's top-paid business chief, Mukesh Ambani of Reliance Industries, got a total remuneration of Rs 44.02 crore in 2007-08, the last fiscal year for which the salary data is available.
Ambani's package is just about one-fifth of the same for even Vikram Pandit, also and India-born person and CEO of banking behemoth Citigroup, which had to seek the US government's support to keep running.
Pandit is fourth highest-paid CEO in the US with $38.2 million (about Rs 200 crore) pay packet, while another Indian-born CEO at a US company, PepsiCo's Indra Nooyi, is at the 36th slot with a pay package of $13.98 million (about Rs 70 crore).
Pandit is also the highest paid CEO for bailed out banks in the US.
The US economy shrank in the fourth quarter of 2008 by over six per cent maximum fall in 26 years and the economy is on a downward slope for 17 months now.
In comparison, India is still maintaining a growth rate of about 7 per cent. While the growth rate projections for India has also declined from 9-10 per cent previously, the most pessimistic view also estimates a growth rate of 4-5 per cent to be maintained in the country.
However, trends in the size of economy do not seem to be reflecting in the executive pay packages in the two countries.
As per a survey conducted by Wall Street Journal, the overall CEO compensation at American firms has declined, but Motorola's Jha still got a hefty package of $104 million in 2008, making him the top paid CEO in the country.
In India, none of the business executives get paid even $10 million (Rs 50 crore), while there are just about two dozen people getting more than Rs 10 crore.
These include RIL's Mukesh Ambani, Sun TV Network's Kalanithi Maran and Kavery Maran, Madras Cement's P R Ramasubrahmanya Rajha, Reliance Communications' Anil Ambani, Ranbaxy Labs' Malvinder Mohan Singh, Bharti Airtel's Sunil Mittal, Jindal Steel's Naveen Jindal, JSW Steel's Sajjan Jindal and Grasim Industries' Kumar Mangalam Birla.
Jha is the only CEO in the US to get a compensation package exceeding $100 million, as per the WSJ CEO Compensation Study, which was conducted by management consulting firm Hay Group and is based on an analysis of CEO pay of the first 200 US companies with fiscal year 2008 revenue of at least $5 billion that filed their proxy statements between October 2008 and March 2009. The study would be updated as companies file new proxies.
The survey showed that overall, the median chief executive salary and bonus paid last year by 200 big American companies declined 8.5 per cent to $2.24 million, as profits and stock prices were hit by recession.
Including the awarded value of stock, stock options and other long-term incentives, total direct compensation for chiefs slipped 3.4 per cent to a median of $7.6 million.
In the wake of the financial meltdown, huge executive compensations at American companies had come in for severe criticism from different quarters.
The payouts for chief executives dropped sharply at banks and brokerages.
The survey noted that median annual cash compensation for CEOs in the financial industry fell 43 per cent, to $9,76,000. Total direct compensation fell 14.2 per cent, to a median $7.6 million.