Top executives on the board of the country's largest private sector lender, ICICI Bank, did not receive either performance bonus or stock options during the year ended March 2009, according to the bank's annual report.
Executive director K Ramkumar said the top management decided to forgo its bonus payouts and stock options.
"Our executive management went to the board and said it would not be proper for them to accept bonus and stock options given the condition of the economy and the priorities of ICICI Bank. KV Kamath (who took over as the non-executive chairman in May this year) and other executives on the board decided not to take any bonus proposal to the board committee," he said.
Employee stock options of second-rung management, from assistant general managers to senior general managers, were slashed by half and the first vesting schedule extended from one to two years. The bank does not grant stock options to employees below the assistant general manager level.
While the bank is yet to announce pay hikes in the current financial year, Ramkumar said, "Our compensation policy in 2009-10 will depend on the state of the economy, whether we have been able to put the desired cost structures in place and our performance as ICICI Bank. There are signs that the economy is turning around and financial year 2009-10 will be better than the previous year."
For senior management, stock options forms a large part of the overall compensation package as compared with other components such as basic salary and performance bonus.
In 2007-08, Kamath and Chanda Kocchar, who was the joint managing director and CFO till the end of April this year, received 270,000 and 180,000 stock options, respectively, apart from performance bonuses of Rs 4,324,800 and 2,244,000, respectively.
In the same year, other members of the senior management, including K Ramkumar, current ICICI Prudential CEO V Vaidyanathan, current ICICI Securities CEO Madhabi Puri Buch, and executive director Sonjoy Chatterjee received 125,000 stock options each. For the quarter ended March 31, 2009, the private sector lender's standalone net profit had dropped by over 35 per cent to Rs 743.76 crore (Rs 7.44 billion).