rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Big pay rise for Indian private bank CEOs

Big pay rise for Indian private bank CEOs

Last updated on: June 20, 2012 10:18 IST

Big pay rise for Indian private bank CEOs

     Next

Next
Somasroy Chakraborty in Kolkata

The top three private banks in the country - ICICI Bank, HDFC Bank and Axis Bank - have rewarded their chief executives with higher remuneration in 2011-12, in line with the improved performance of their organisations.

According to industry players and analysts, private banks fared better than their state-run rivals and improved their profitability, despite the uncertainty in the macro-economic environment.

ICICI Bank, the largest private sector bank in India, increased remuneration of managing director Chanda Kochhar by 33.2 per cent.

Kochhar received Rs 4.25 crore (Rs 42.5 million) in 2011-12 against Rs 3.19 crore (Rs 31.9 million) in the previous year.

Click NEXT to read more...


Image: A view of the Reserve Bank of India.
Photographs: Rupak De Chowdhuri/Reuters

     Next

Big pay rise for Indian private bank CEOs

Prev     Next
Prev

Next

It included basic pay, performance bonus, allowances and perquisites and retirement benefits such as contributions to provident fund, gratuity and superannuation fund.

HDFC Bank's managing director Aditya Puri also believed to be the highest-paid CEO among Indian private banks, got a 25 per cent rise.

He earned Rs 4.90 crore (Rs 49 million) last financial year, which included basic pay, performance bonus, allowances and perquisites, contributions to provident fund and superannuation fund.

His remuneration was Rs 3.92 crore (Rs 39.2 million) in the previous year. Shikha Sharma, managing director of Axis Bank, received Rs 2.53 crore (Rs 25.3 million) in 2011-12  about 14 per cent more pay than in the previous year.

This, however, excludes retirement benefits such as contributions to provident fund, gratuity and superannuation fund.

Click NEXT to read more...


Image: Chanda Kochhar, Managing Director, ICICI Bank.
Photographs: Vivek Prakash/Reuters

Prev     Next

Big pay rise for Indian private bank CEOs

Prev     Next
Prev

Next

All three banks did better in financial numbers. In 2008-09, just before Kochhar took charge of ICICI Bank, the lender's net profit growth was only five per cent.

A rising delinquency rate was eroding profitability. After becoming the CEO in May 2009, Kochhar decided to cut the unsecured loan book that capped further rise in bad loans and improved the lender's financial performance.

ICICI Bank's consolidated profit after tax grew 25 per cent in 2011-12. Kochhar's performance bonus during the year was increased by 56.6 per cent to Rs 1.3 crore (Rs 13 million).

HDFC Bank, the second largest private bank in India, has seen over 30 per cent growth in annual profits for the last five financial years.

Click NEXT to read more...


Image: Aditya Puri, Managing Director, HDFC Bank, left, with Rana Talwar, Chairman, Centurion Bank of Punjab.
Photographs: Arko Datta/Reuters

Prev     Next

Big pay rise for Indian private bank CEOs

Prev     
Prev

In 2011-12, Puri received a performance bonus of Rs 1.51 crore (Rs 15.1 million), against Rs 0.93 crore (Rs 9.3 million) in the previous 12 months.

For Axis Bank's Sharma, variable pay increased by 30 per cent last financial year, following a 25 per cent rise in Axis Bank's net profit.

In January 2012, the Reserve Bank of India had released guidelines on compensation of whole-time directors, chief executive officers, risk-takers and control function employees of foreign and private sector banks.

According to those guidelines, private banks need to frame a compensation policy and implement it from 2012-13.

Also, the banks' capital adequacy and cost to income ratios must support the remuneration packages of its senior management employees, the central bank said.


Image: Shikha Sharma, Managing Director, Axis Bank.


Prev     
Source: