Bajaj Auto, Bosch and Maruti Suzuki shied away from disclosing pay ratios of directors
Almost 70% of the top-10 highest paid directors of Nifty companies are individual promoters while average remuneration of an executive director of a company listed in the benchmark index comes to Rs9 crore per annum, reveals an analysis from Bengaluru-based InGovern Research Services Pvt Ltd.
According to the analysis, 34 out of the 50 companies in Nifty index have disclosed pay ratios of directors. While public sector units (PSUs) are exempt from pay-ratio disclosure norms, three companies, Bajaj Auto Ltd, Bosch Ltd and Maruti Suzuki India Ltd shied away from making any such disclosures, InGovern said. HCL Technologies, ACC and Ambuja Cements have not yet made their FY-2015 annual reports available as they have different year-ending dates.
The highest remuneration to a director was to Pawan Munjal, managing director of Hero MotoCorp, who was paid Rs43.91 crore for FY15. Ten directors were paid remuneration in excess of Rs19 crore. This included Kumar Mangalam Birla, the non-executive director of Ultratech Cement, who is also the chairman of the Board of the company. "Seven out of these 10 (i.e. 70%) directors are promoters of their respective companies. The three highest paid directors, Pawan Munjal, Brijmohan Lall Munjal and Sunil Kant Munjal, are directors of Hero MotoCorp. Lupin also contributed two directors, Desh Bandhu Gupta and Vinita Gupta, to the top-10 list," InGovern says.
The report says, eight directors were paid more than 1% of the standalone net profits with the highest being 2.33%. Remuneration paid to 11 directors exceeds 400 times the median employee pay of their companies. This includes three directors each of Hero MotoCorp and Lupin. The average median employee remuneration is about Rs5.87 lakh.
As per the report, Kumar Mangalam Birla, Chairman of Aditya Birla Group, is the only non-executive director among the top 10 highest paid directors. Mr Birla is non-executive director of four companies on Nifty and was paid Rs40.5 crore in FY2015 from these companies, InGovern says.
On an average, remuneration of an executive director of a Nifty company constituted 62% as fixed pay and 38% as variable pay. A higher variable component of remuneration indicates that the remuneration policy is aligned with performance of the company. Remuneration of 16 directors was less than 0.05% of the net profits of their companies.
At present, 10 PSUs, Bank of Baroda, BHEL, Bharat Petroleum, Coal India, GAIL, NTPC, ONGC, Punjab National Bank, Power Grid Corp and State Bank of India in part of the 50-stock Nifty index.
InGovern says, "In our opinion, such an exemption should not have been given to PSUs. In the interest of good governance, and greater transparency, all companies should be treated equal and selective exemptions should not be given. The Government of India should view its role as a dominant shareholder and as a regulator as distinct and should not have differing regulations for entities where it is a dominant shareholder." 
The Companies Act, 2013 empowers shareholders to vote on proposals for fixing of remuneration of directors. In spite of being provided with such an authority, shareholders of Indian companies have rarely taken a principled stand in cases where excessive remuneration was paid to the directors, until recently. 
The recent cases of Tata Motors (where proposals of remuneration to executive directors was voted against) and Apollo Hospitals (where more than 46% voting institutional shareholders voted against the proposals for appointment and remuneration of the executive vice chairperson and managing directors) shows a changing trend where shareholders are actively analysing and voting on remuneration proposals.




1 year ago


In analysis did you include only salary/bonus? OR ESOPs also included. If include, the picture might change...

Sovereign Gold Bonds issue extended to November 30
The Reserve Bank of India (RBI) on Wednesday extended the issue date of the Sovereign Gold Bond scheme by four days to November 30 to enable their proper processing.
"Large number of applications has been received by banks and post offices. To enable smooth uploading of applications into RBI's E-kuber system, particularly by the post offices, it has since been decided to shift the issue date of the Sovereign Gold Bond from November 26, 2015 to November 30, 2015," the RBI notified on its website.
The first tranche of Sovereign Gold Bonds, which opened for subscription from November 5 to November 20, 2015, were to be issued on November 26.
The scheme, so far, has generated lukewarm response, with bankers pegging the overall
collections at Rs.150 crore. This, according to banks, is owing to a higher issue price, which the RBI had set at Rs.2,684 per gram, while the ruling market price was lower.
The finance ministry announced last month that the bonds would be sold through banks and notified post offices. These bonds would be issued by the Reserve Bank of India on behalf of the central government.
Finance Minister Arun Jaitley, in the 2015-16 budget, had announced the development of a financial asset - sovereign gold bond - as an alternative to the precious metal, and the borrowing through issuance of the bond will form part of market borrowing programme of the government.
The gold bonds are denominated in multiples of gram(s) of gold with a basic unit of one gram while the minimum investment limit is two grams.
The maximum subscription is 500 grams per person per fiscal (April-March) and for joint holders, the limit will be applied on the first holder.
As per the scheme, the gold bonds will be sold only to resident Indian entities including individuals, Hindu undivided families, trusts, universities, and charitable institutions.
The issue and redemption price are in Indian rupees fixed on the basis of the previous week's (Monday-Friday) simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Ltd.
As per the scheme, the bond tenure will be eight years with exit option beginning the fifth year onwards. The bonds will also be tradable in the bourses.
The rate of interest will be 2.75 percent per annum payable semi-annually on the initial value of investment.
Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.
As to the tax treatment, interest on gold bonds will be taxable as per the provision of Income Tax Act, 1961 and the capital gains tax shall also remain same as in the case of physical gold.
Commission for distribution shall be paid at the rate of one percent of the subscription amount.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.



Shirish Sadanand Shanbhag

2 years ago

Government got only peanut of gold just less than 3 kgs, in whole country, when Government was expecting gold in few tons.
With only 2.75% interest per annum, who will buy these bond in India?

Failure on reforms like GST, land law could hit investment: Moody's
Moody's Investors Service on Wednesday said the failure to implement reforms by passing the GST and land bills in parliament could potentially hurt investments amid weak global growth and prove to be a "downside factor" for Indian companies.
"It seems highly unlikely that the major reforms will get enacted by the upper house of the Indian parliament where the ruling coalition is in minority. A failure to implement these reforms could hamper investment amid weak global growth," Moody's vice president Vikas Halan said in a report.
"The government is unlikely to win a majority in the upper house if it keeps losing state elections like it did recently in Delhi and Bihar. Opposition parties are unlikely to allow key reforms to go through," he added.
The constitution amendment bill for Goods and Services Tax (GST) has been passed by Lok Sabha, and is pending in the Rajya Sabha, where the ruling NDA does not have majority.
Minister of State for Finance Jayant Sinha told reporters here on Monday that the government is making efforts to convince the opposition about the GST bill.
"We are trying to talk with them (opposition) about all the aspects of GST. We all recognise how important this is for the economy so we are in continuous discussion to see what we can do to get it passed in the winter session," he said.
The American agency cautioned that continued weak global growth and the prospect of the US Federal Reserve raising interest rates may also have an impact on Indian companies.
"The corporates remain vulnerable to the volatile Indian rupee as against the US dollar and to low commodity prices, which has in turn led to a sharp decline in external trade," Halan said.
"The fall in commodity prices has benefited many Indian corporates given the country's status as a net importer of raw materials and its recent history of high inflation. But low commodity prices will result in deterioration of credit metrics of metals and mining companies," he added.
Other "downside factors" listed by Moody's are loss of reform momentum leading to annual GDP growth falling below 6 percent, resulting in deterioration of credit metrics, besides higher interest rates brought on by rising inflation and exchange rate volatility, resulting in a tight funding environment.
Among the upside factors include further government measures that could sustain the GDP growth at 8 percent plus, leading to a broad-based improvement in corporate credit metrics.
Also, improvement in the global macroeconomic environment leading to stabilising commodity prices and credit markets would be positive, it said.
Sector-wise, Moody's expects upstream oil and gas companies to benefit from lower fuel subsidy burdens, although low crude and domestic natural gas prices will continue to hurt profitability.
However, refining and marketing companies should benefit from healthy margins as demand growth outpaces expected capacity additions, Moody's said.
Moody's negative outlook for the steel industry reflects elevated leverage and an extended period of low prices owing to continuing steel imports, while the negative outlook for metals and mining companies reflects bleak global commodity prices.
In real estate, Moody's expects demand to improve in 2016 on the back of lower interest rates, although approval delays could postpone project launches for property developers.
In the auto sector, Moody's said that retail sales volume will grow 6 percent in 2016 on sustained growth in passenger vehicles sales and recovery in commercial vehicle sales.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.



Ganesh Kamat

1 year ago

GST Simplified,
1) For Big Tax collections
take 1% Tax from 20 Taxpayers
than 20% Tax from one Taxpayer.

2) Simple Tax of 1% on Receipt /Transaction /Interest /Sale /Gift /Loan /Benefit /Salary /Dividends /Rent /Custom.....
any & all inward cash, Cheque etc.

3) Average say on Rs 30 L Receipt,
Pay Rs. 0.3 Lac Tax per year.
If Taxpayers = 60 Cr.
Tax collection will be 18 L- Cr.

4) Simple Tax means more Taxpayers, more collection & No refund Problem.

5) At present, we have say @ 3 Cr Taxpayers,
with Collection of say @ 3.5L-Cr,

6) So with 1℅ Tax, the Taxpayers will work to improve Business / Goods Services/ R. & D. / Social work.
So more Employment, make in India, less Farmer Suicide & Peace of mind to the people.

7) Bank Account number is your mobile number.

8) Tax payment by your mobile number @ RBI a/c,
In bank transaction, the Bank will deposit your 1℅ Tax by your mobile number @ RBI a/c directly.

9) For cash Transaction pay similar to Post paid Mobile charges,
to your mobile number @ RBI a/c.
Most will pay if the Tax is 1% & simple to pay.

10) Your Bank Account Number should be mobile number & connected to PAN/ AADHAAR /Passport/ Election Card etc. For Simplicity.

11) Tax collection will be distributed to State & Local bodies, say 10% each, from the place of collection.

12) Also add 1% more (L.P.F.)
Less Privilege Fund,
similar to PPF for,
social / self benefit,
to give Power to the people for Social Cause / in your bad days.

13) In short Pay Rs. 20- for every Rs. 1,000- Received.

i) Rs. 10- as tax to RBI
ii) Rs. 10- in your (L. P. F.) a/c. Could be use for social cause/ for your bad days.

14) L. P. F. (Less Privilege Fund)
of 18 L- Cr, with 60 Cr voters, will reduce dependency on the Government for the Social development. Fund will be used for the Social cause / in your bad days.

15) Keep faith in 60 Cr voters, as they will take care of their neighbours, in need.
Also most will pay, if Tax is 1℅ & Simple to pay.
Only Indian can make better India.

16) Can consider more tax for Higher Receipt, say above 0.5 Cr per year, payable at the year ending.

17) All Transactions are Traceable as mobile number is once Bank a/c number & connected to PAN/ AADHAAR / Election card.....
So, No Corruption & Black Money Problem.

18) Babus Harassing the youth,
Traders,Farmers, Voters.. who wants to work.
Babus are ruthless as they
pay "Protection Money" to......?
for Posting/ Promotion/ Permit...
Administrations Reform is a Must,
For getting Votes too!!

19) Farmers suicide can get reduced, by encouraging them to sell their farm products on Railways to commuter & roads to motorists, also we need more Passenger Train, to help farmers to sell farm products, to nearby Towns.

20) Expecting Feedback on How to make India Peaceful Place by Refined, Simple Laws.
No blame game please.
Media/ Babus /Netas /Judicial Role is Eminent along with People.

For "Sare Jaha Se Achha Hindustan Hamara." forward this message.

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