Obscene inequality: These top executives get more than 500 times of company's median salary! Know elite list from Hero Motocorp, Shree Cement, Tech Mahindra, Bajaj Auto, JSW Steel, Hindalco, Infosys

New Delhi,28 September, 2020: Imagine someone in your company getting 500 to 700 times more than the median salary of employees in your company! Yes, its true and happening in Indian Corporate world.

According to a report by an IIT Delhi professor who also teaches at IIM Ahmedabad, as many as 7 top corporate executives got more than 500 times the median salary of the employees in their respective company in 2019-20.

Also, more than 30 top companies among the top NSE companies in India paid their Key Management Personnel (KMP) in excess to 100 times of the median salary of their employees in the financial year 2019-20.

The median salary figure is arrived at finding the pay of an employee who is placed in the middle of a list which is sorted in the order of highest paid to lowest paid employees in a company.

Boom! These corporate leaders get more than 500 times the median salary

According to the report compiled by Dr Reetika Khera, Associate Professor of Economics in Indian Institute of Delhi, the pay ratio reveals obscene inequality of pay structure in the corporate world.

For example, Pawan Munjal of Hero Motocorp got Rs 84.6 Cr in annual remuneration which was 752 times the median salary of his employees. He is followed by HM Bangur of Shree cement who got paid Rs 41.75 Crore, which was 660 times the median salary in his company.

"PAWAN MUNJAL OF HERO MOTOCORP GOT RS 84.6 CR IN ANNUAL REMUNERATION WHICH WAS 752 TIMES THE MEDIAN SALARY OF HIS EMPLOYEES."

CP Gurnani of Tech Mahindra and Rajiv Bajaj of Bajaj Auto are placed at third and fourth position with 618 and 600 times of the median salaries of employees in their respective companies. Similarly, Sajjan Jindal of JWS Steel gets 581 times the median salary paid in the company.

Pay Ratio in Corporate World: More than 500 times of median salary

Obscene inequality in India: Pay ratios in NIFTY fifty companies

The pay ratio (in descending order) of the top paid Key Managerial Personnel (KMP) to median remuneration for 42 private companies in the NIFTY list for 2019-20 is below. The lowest pay ratio is was reported at Maruti Suzuki, at 1:39.

The table below also includes total remuneration paid to the top corporate leaders.

Pay Ratio: Highest paid employee to median remuneration

The above data is based on the self-disclosure of the companies.

"Since2015,a Securities and Exchange Board of India (SEBI) rule requires that publicly traded companies disclose the remuneration to their top management vis-à-vis other employees. The disclosures are mandated under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and remuneration of Managerial Personnel) Rules, 2014," Prof Kehra said.

She said that the data has been compiled from a table titled "Remuneration of Directors and Key Managerial Personnel".  "Sometimes, it is also reported along with the pay ratio. It does not include stock options," she said.

Reliance Industries Limited evades remuneration reporting

As per the research, the Reliance Industries Limited (RIL) is the only private NIFTY fifty company that does not report the pay ratio.

The company’s annual report states that the "Disclosures relating to remuneration and other details as required under Section197 (12) of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. Having regard to the provisions of Section 136 (1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company."

The company, however, adds that "the said information is available for inspection on all working days, during business hours, at the Registered Office of the Company. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request."