Million-$ CEO club sees 17% drop in membership in financial year 2021

MUMBAI: Membership to the elite "million-dollar CEO club" shrank by nearly 17 per cent in FY21 even as the average take-home of C-suite executives shot up.
The number of CEO/CXOs in the million-dollar salary bracket (over Rs 7.4 crore) dropped to 125 in 2020-21 from 150 a year ago, while the average salary jumped by over 21% to Rs 20.4 crore (Rs 16.8 crore in FY20).
According to TOI’s "million-dollar salary" study conducted by EMA Partners, the total compensation earned by 125 top executives increased by just 1.4 per cent to Rs 2,549 crore in 2020-21. The study is based on annual reports of BSE 200 companies.
Based on TOI’s previous studies, the growth in total compensation has come down since FY19, when it witnessed a near-14 per cent jump, to around 2 per cent in FY20. However, average salaries have been on the rise. In FY20, average salary growth was muted at 0.4 per cent, while in FY19 it dipped by 3 per cent.

One of the reasons for the shrinking of the elite club is the weakening of the rupee against the dollar. The rupee has depreciated nearly 6 per cent against the dollar since a year ago, ending FY21 at just over Rs 73.
To calculate the million-dollar salaries, the rupee was taken at 74 to the dollar. This set a Rs 7.4-crore annual compensation as the cutoff to be included in the "million-dollar salary club". In FY20, the rupee was at 70 against the dollar, when the elite club had 150 members.
The club of professional CXOs at 68 continues to outpace that led by promoters, which is at 57. The gap between the growth in compensation earned by promoter CXOs and professional CXOs too has widened.
In the year under review, while professional CXOs saw a 6.4 per cent growth in compensation, promoter CXOs took a hit as their total compensation declined by 2.3 per cent in FY21.
Among promoter CEOs, Kavery and Kalanithi Maran of Sun TV lead the list this year as well with a compensation of about Rs 88 crore each. Sajjan Jindal is back in the top 10 with a compensation of Rs 73 crore, which includes a profit-linked commission of Rs 60 crore.

EMA Partners India MD K Sudarshan said, "Despite the pandemic, which raged through 2020-21, most businesses have bounced back smartly and companies have posted impressive numbers. Companies have also witnessed depressed costs due to various cost-control measures through the year. Consequently, we have not seen any significant change in CEO compensation, which has seen a slight increase when compared to the previous year. As has been the trend, in line with the growing scale of businesses, we continue to see more professionals in the mix who are now earning top-dollar compensation in line with their global peers."
Some executives who retired and exited the club are former HDFC Bank MD Aditya Puri and former Asian Paints MD & CEO KBS Anand. New entrants to the club include Thierry Delaporte, who took over as the CEO of Wipro in 2020 with a compensation of Rs 64 crore, which takes him straight to the top 10; Pratik Pota of Jubilant FoodWorks (Rs 12 crore); Sunil D’Souza of Tata Consumer Products (Rs 10 crore); and Samina Hamied of Cipla (Rs 8 crore). Some like Salil Parekh of Infosys have made it to the top 10 with a 45 per cent jump in compensation to about Rs 50 crore as it includes Rs 31 crore of stock options exercised during the year.
Sudarshan said he expects to see a growing number of professional managers dominating this list even as hands-on business promoter managers continue to feature as their businesses gain scale. "Shareholders and watchdogs are closely watching CEO compensation than ever before. Boards will tread with caution and keep overall shareholder interests in mind and CEO performance in listed businesses will come under increased scrutiny," said Sudarshan.
In the million-dollar salary club, 28 CXOs are from the pharmaceuticals sector; 19 are from industrial/manufacturing (down from 33 a year ago); 16 are from diversified conglomerates, 14 are from automotive (down from 17), 13 are from financial services, 10 from consumer/FMCG and 10 from IT/ITEs.