Indian bourses beat global leaders with CEO pay hike

NSE’s Ravi Narain was the top-paid CEO, with gross remuneration of about Rs7.35 crore for the year 2010-11, followed by BSE MD and CEO Madhu Kannan (Rs2.04 crore) and MCX-SX chief Joseph Massey (Rs1.80 crore)

New Delhi: Indian stock exchanges may not rank high on international charts in terms of the volume of business done, but they have beaten global market leaders in terms of pay hikes given to their top executives, reports PTI.

The two largest stock exchanges of the world—the NYSE Euronext and Nasdaq OMX Group—cut down the remuneration paid to their respective chief executive officers (CEOs) last year.

At the same time, the annual remunerations paid by Indian bourses, including market leaders National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) as well new entrant Multi Commodity Exchange Stock Exchange (MCX-SX), rose during the financial year ended 31 March 2011.

NSE’s Ravi Narain was the top-paid CEO, with gross remuneration of about Rs7.35 crore for the year 2010-11, followed by BSE MD and CEO Madhu Kannan (Rs2.04 crore) and MCX-SX chief Joseph Massey (Rs1.80 crore).

NSE CEO Ravi Narain was paid a net remuneration of Rs3.85 crore, but the BSE and MCX-SX did not specify whether the remuneration figure for their chiefs was a gross or net amount.

The remuneration figures for all three stock exchange chiefs rose from the levels seen in the previous year, 2009-10, when Mr Narain's package stood at Rs6.60 crore, Mr Kannan’s at Rs1.60 crore and Massey’s was Rs1.50 crore.

In contrast, NYSE Euronext CEO Duncan Neiderauer saw his total compensation decline to $7.05 million (about Rs 31 crore) in 2010 from $7.2 million in the previous year.

Nasdaq OMX CEO Robert Greifeld’s total compensation fell more sharply to $5.8 million in 2010 from $13.8 million in the previous year.

The NYSE Euronext and Nasdaq OMX are the world’s two largest stock exchanges on a number of parameters, including trading volumes, traded turnover value and the market capitalisation of listed stocks.

On the other hand, Indian bourses NSE and BSE do not figure among the top ten in the world in terms of market cap or turnover value, but are ranked 4th and 7th in terms of the number of trades, as per the first-half figures for 2011.

Interestingly, the latest statistics report from the World Federation of Exchanges (WFE) showed that the trading volume and turnover value fell in the first six months of 2011 at both the US stock exchange giants NYSE Euronext and Nasdaq OMX, as also on the top Indian bourses NSE and BSE.

While the decline in top executive pay at the US bourses was in sync with the decline in their business volumes, a reverse trend has been seen at the Indian exchanges.

The figures for MCX-SX, which trades only in currency market, were not available in the WFE report for the first half of 2011.

Among other major global bourses, London Stock Exchange CEO Xavier Rolet’s salary remained unchanged at 670,000 British pounds in the last financial year, ended March 2011.

However, Mr Rolet’s total remuneration rose to 1.97 million British pounds (from 1.71 million British pounds in the previous year) due to a higher performance bonus payment.

The salary figures were not available for a host of other major exchanges, including the Tokyo Stock Exchange and China’s Shanghai and Shenzhen stock exchanges.

The figures were not comparable for the Hong Kong Exchanges and Clearing (HKEX) either, as it appointed a new CEO last year.

While Paul Chow, who retired as its CEO on 16 January 2010, got a total of 4.89 million Hong Kong dollars, his successor Charles Li’s total remuneration was 16.62 million Hong Kong dollars for 2010.

User

FM discusses rupee depreciation with RBI chief

Finance minister Pranab Mukherjee said the government was closely monitoring the situation and intervention in the currency market would be considered whenever necessary

Washington: Finance minister Pranab Mukherjee has said that intervention in the currency market would be considered at an appropriate stage and he has discussed with Reserve Bank of India (RBI) governor D Subbarao the situation created by the depreciating rupee in the past few days, reports PTI.

"I had a discussion with the RBI governor as he is here," Mr Mukherjee told a group of Indian reporters here. The finance minister and RBI governor are here to attend the annual meetings of the Indian Monetary Fund (IMF) and the World Bank.

Mr Mukherjee said the government was closely monitoring the situation and intervention in the currency market would be considered whenever necessary.

"We will watch the situation for some time and as and when intervention would be required that will be considered at that stage," Mr Mukherjee said in response to a question.

In order to check high volatility in local currency value, central banks world over intervene in markets through buying or selling of foreign currencies, as required.

This week alone, the rupee lost 231 paise, or 4.89%, against the US dollar.

On Friday, rupee closed at 49.43 per dollar after falling to 49.90 per dollar. The sharp depreciation in the rupee has been mainly attributed to rising demand for dollars from foreign institutional investors (FIIs) and oil companies.

RBI deputy governor Subir Gokarn had earlier said that there was no move of intervention in the currency market as this time.

"We, at this point, do not see any intervention from a rate targeting view point. That is something that would reflect a change in policy stance, which we are not doing at this point," Mr Gokarn had said.

"If we do intervene at all, it will be with a very narrow objective of smoothening what might be a very volatile market situation, nothing beyond that," Mr Gokarn had said.

Meanwhile, responding to questions on price rise, Mr Mukherjee said substantial inflationary pressure was there because of demand.

"There is a demand side pressure. There is no doubt about it, because we had to resort to huge fiscal expansion from December 2008 to first quarter of 2009... stimulus package (to deal with the global financial crisis was) almost 3% of GDP (gross domestic product)," he said.

The fiscal expansion had its impact on fiscal deficit which went as high as 6.6% of the GDP from 2.5%, he said.

As regards food inflation, he said, it was substantial due to the constraints on the supply side. "Therefore, we have to remove those supply side constraints. We have taken some short and medium term steps," he added.

The headline inflation is nearing 10% despite the RBI raising key policy rates for 12 times since March 2010 to contain price rise.

User

A comprehensive Will is the only way to handle your legacy

Dr SD Israni, advocate & partner, SD Israni Law Chambers, spoke on the need for preparing a comprehensive Will and explained how to complete all the requisite nomination & transmission formalities

"Many of us keep postponing the day of reckoning. But it's imperative that you have to leave behind a comprehensive Will. So better start thinking about it," said Dr SD Israni, advocate & partner at SD Israni Law Chambers. He was speaking at a seminar on Wills and nominations, organised by Moneylife Foundation on Saturday, 24th September.

Drawing from his long experience, Dr Israni talked about how to prepare a comprehensive Will, and how to complete all the requisite nomination & transmission formalities for both movable and immovable properties. He explained terms like probate, transmission and nomination, which play a crucial role in matters regarding shares and other assets.

The main elements of a Will are the name and identity of the author/testator, two witnesses and their addresses, the list of assets and their distribution. This must be signed by two witnesses and the testator in the presence of each other. He said, "A codicil is a part of the Will, which comes into play if some minor changes are to be made. If you have to make major changes, like naming a different heir, make a new Will."

The religion of an individual matters for succession under the Hindu Succession Act, Muslim personal law, Parsi personal law, Christian law and for others by default under the Indian Succession Act. When asked about assets which are not mentioned in the Will, he said, "Assets or shares, etc., which are mentioned in the Will automatically go to the successor as per law, or stay with the nominees or owners specified."

Dr Israni explained the difference between being a nominee and an heir in case of transmission of shares. Traditionally, it was understood that a nominee is like a trustee, who has to transfer the shares to the legitimate heirs or claimants. However, last year, a Bombay High Court ruling said that a nominee can possess the shares like an heir unless an order is issued in favour of the heir. "This kind of misbalances the legal interpretation," he said.

However, in such a case, if the shareholder has already willed his shared to an heir, the nominee's claims will be overridden. But for that, the claimant has to prove he is entitled to those, and has to have the Will probated.

When asked about immovable properties held jointly, he said, "The nominees all have shares in that property. So if they want to sell it, they have to come to a conclusion together and then go for stamp duty that is associated with normal property sales. In some other aspects, the cooperative society can have a say-but ultimately, if there is a dispute, the matter must be settled in court."

Dr Israni said, "Young or old, one must make a Will. If one leaves a clear, simple, attested Will which clearly specifies whom he wants to give what, then legal hassles can be avoided. All you need is a piece of paper and two witnesses."

User

COMMENTS

R Nandy

5 years ago

I am fully not convinced by the last line of the article " all you need is a piece of paper and 2 witnesses" . Should it at least not be written on a stamp paper and notarized? Notarization might be useful in case there is any signature mismatch or the will is disputed in court.Any legal opinion on this with examples of case citings will be highly appreciated.

REPLY

Govindan

In Reply to R Nandy 5 years ago


It is better if the Will is registered. Moreover, the Will should be witnesses by a doctor and a lawyer. Two more witnesses are required for Sub-registrar’s office. Make it sure that the witnesses are persons of integrity.

The Will can be cancelled at any time by the Testator. A registered Will can be cancelled by an unregistered Will.

PKMukherjee

5 years ago

I feel sorry ,I could not attend the session of Dr Israni on 24th Sept.
Can I have a CD of his talk . Is it possible to get the format of a Will from him ?
I am willing to pay for the same .

REPLY

R Nandy

In Reply to PKMukherjee 5 years ago

Sample of wills are are available here.
http://foundation.moneylife.in/section/7...

Govindan

In Reply to R Nandy 5 years ago

Please keep in mind:

After the death of the testator or testatrix, the legatees/beneficiaries has to prove that at the time of writing the Will the divisor had a "Sound disposable state of mind", if disputed in a court of law.

Govindan

In Reply to Govindan 5 years ago

Please keep in mind:

After the death of the testator or testatrix, the legatees/beneficiaries has to prove that at the time of writing the Will the Devisor had a "Sound disposable state of mind", if disputed in a court of law.

Govindan

5 years ago


Dr. Irani Saheb says "Preparing a comprehensive Will in the correct manner is crucial if you don't want your heirs fighting over your legacy".

I think whether the deceased dies testate or intestate legal heirs do quarrel. I know the children of a lady who bequeathed all her property through a registered will. Two of her children quarreled and their lawyer advised them to dispute the will! (I think our lawyers have a tendency to advise their clients to dispute legal testaments). After a prolonged and bitter legal fight the genuineness of the will was finally upheld.

REPLY

Sundaram

In Reply to Govindan 5 years ago

Well said,Mr.Govindan.Finally it all boils down to the understanding and good relationship that exists between the heirs/legal claimants.

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)