Auto firms put chiefs' pay on the fast track; bosses earn portion of profit

Automobile companies posted record profits in 2016-17

Automobile company bosses hit paydirt in 2016-17 as their companies posted record profits. 

Vinod K Dasari, managing director of the country’s second biggest truck maker Ashok Leyland, earned Rs 12.89 crore during 2016-17, 60 per cent more than what he did a year ago. Ashok Leyland made a record consolidated profit of Rs 1,633 crore in 2016-17, up 49 per cent from the previous year.

Automobile bosses earn a portion of their company’s profit as commission. Last year’s spurt in chief executive officer pay came largely because of this. 
 

The second highest jump was that of Siddhartha Lal, managing director and chief executive officer at Eicher. Riding on Royal Enfield, the company posted a record profit of Rs 1,664 crore in 2016-17.

Lal, accordingly, took home Rs 9.50 crore, 40 per cent more than a year ago. Lal’s income had grown 26 per cent in 2015-16.  Rajiv Bajaj, who manages the country’s most profitable two-wheeler company Bajaj Auto, took home Rs 25.59 crore, 15 per cent more than in 2015-16. This is higher than the 9 per cent increase in Bajaj Auto’s income during the year.

Like Ashok Leyland and Eicher, Bajaj Auto posted its best annual profit of Rs 3,827 crore last year.

Pawan Goenka, who manages the home-grown automobile major M&M, earned Rs 7.39 crore during 2016-17, 16 per cent higher than a year ago. Goenka, who took over as managing director in November 2016, saw his income grow 7 per cent in 2015-16, when he was executive director.

Pawan Munjal, chief executive officer, managing director and chairman of the country’s largest two-wheeler maker Hero MotoCorp earned Rs 59.66 crore in 2016-17, a rise of 4 per cent from the previous year.

Munjal tops the list of automobile chief executive officers by pay, which interestingly is significantly lower than the ceiling defined by regulations. 
 

Besides Munjal, his brother Sunil Kant (former joint managing director) and director Vikram S Kasbekar took home Rs 22 crore and Rs 2.22 crore, respectively, last year.

The three top executives together earned Rs 83.92 crore when the ceiling was Rs 457 crore.  Similarly, Bajaj along with three top executives — Rahul Bajaj, Madhur Bajaj and Pradeep Shrivastava — took home Rs 49.86 crore against a ceiling of Rs 538 crore.

The salary of Kenichi Ayukawa, managing director and chief executive officer of the country’s most profitable car maker Maruti Suzuki, for 2016-17 is not known. But he takes home significantly less than his peers.

In 2015-16, Ayukawa earned Rs 3.95 crore.  Some of the chief executive officers on this list are also promoters of their companies and as large shareholders earn dividends. Dasari, Goenka and Ayukawa are professional chief executive officers.