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A huge chunk of people lost their jobs and saw their livelihood get disrupted after the Covid-19 pandemic ravaged the Indian economy early last year. However, top players of India’s corporate sector seem to remain unaffected. Top executives of many companies saw their average salaries increasing by 13% in the pandemic-ravaged year.
This was a consequence of companies going all guns blazing to retain their MDs and CEOs to help them sail through the pandemic period where the businesses across sectors saw unparalleled disruption due to lockdowns and other restrictions.
In FY21, top executives of several companies received a double-digit hike in their remuneration as compared to a minuscule 3% increase in FY20 when the nationwide lockdown had impacted the last 10 days of the fiscal year. Boards of many companies took the call to slash the bonuses and variable pay or freeze them during that time which ended up bringing down the salary of top executives.
Companies hike salaries of top executives to retain and reward them
However, the scenario changed for the better this year with paychecks having bigger salary figures. This March-end, the average pay of top MDs and CEOs stood at Rs 10.41 crore as compared to Rs 9.22 crore in the previous year as per a report in The Economic Times.
The report cites an analysis of 80 companies of the BSE 200 on the basis of data available through annual reports and does not include promoters. Some of the top companies which rolled out fat paychecks include the giants like Tata Steel, Ashok Leyland, Godrej Properties, Infosys, Tata Consultancy Services and Larsen & Toubro among others.
The remuneration of a CEO is inclusive of salary, bonus, commission, the value of prerequisites and other paybacks. There was increased attrition last year with many C-level executives leaving their existing jobs for start-ups and new-age businesses which offer massive opportunities to create wealth. This led to the larger companies raising the salaries of the top leaders in order to retain them amid challenging times.
Members of nomination and remuneration committees are of the opinion that the CEO had the most unnerving task of steering the company and people through the pandemic that wrecked almost everything. Owing to this they didn’t hesitate when the time for rewarding them came.