Economic Slowdown hits Wallets of India’s top executives

Business India’s Highest Paid Executive Survey reveals Anil Ambani at the No. 1 position, way ahead of brother Mukesh Ambani, who is at No. 19. For the first time since the Business India survey started in 2002, Mukesh Ambani was not part of the Top Ten earners in India.

Last year’s financial crisis hit senior executives as many companies went into austerity drives and reduced the annual compensation of many of their executives. But many leading executives like Baba Kalyani of Bharat Forge, Onkar Kanwar of Apollo Tyres, Sajjan Jindal of JSW and not to mention Mukesh Ambani took voluntary pay cuts in either salary or commissions and performance bonuses.

This year the buzzword across corporate India has been cost-cutting, beginning with payrolls. For the first time since liberalization, salary hikes were in single digits and while many companies gave performance bonuses, the payouts were much smaller. Studies by various HR consultancies revealed that the worst affected by the meltdown were the top leaders.

The slow down has in fact resulted in a change being introduced in the salaries at the managerial levels. This is in line with the kind of pay reforms being advocated in the West. But executive compensation in India is always a thorny issue, with many companies having the C level positions occupied by owner – managers.

So what is in store for 2010? Industry gurus predict that it is best to get used to smaller increases in base pay and not to bank too much on bonuses and ESOPs. Whether Business India is right or wrong on this – you will have to wait till next year to get the answer.

*The names in the Business India list have been taken from the annual reports of listed public companies; under Section 217(2A) of the Companies Act, 1956.