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Are Indian CEOs overpaid?

May 28, 2007 11:18 IST
Prime Minister Manmohan Singh has triggered a nationwide debate by urging India Inc to cap salaries for top executives.

While he hailed the industry for rising profits and wealth generation, he cautioned that showing off wealth and wasting money on parties and marriages could cause social unrest in the country.

Top executives justify their pay hike as its proportional to their value addition and the profits the company makes. India's economic boom has resulted in India surpassing Japan with 36 billionaires, according to a  Forbes survey.

The Confederation of Indian Industry's new president and Bharti chief Sunil Mittal has defended CEOs' salaries by saying that it cannot be legislated and business profitability cannot be limited.

And investors are unlikely to raise questions on Mittal's Rs 12.86 crore annual package as Bharti Airtel posted over 100 per cent rise in profit in the last financial year.

Mittal, has however, said that there should be a co-relation between the size of a company and the salaries to their employees.

Is the PM's demand justified? Are Indian CEOs overpaid? Is this a going back on the reform process? Is the prime minister toeing the socialist line?

How will a CEO paycut help inclusive growth? Tell us your views and suggestions.