Corporate Affairs Minister Salman Khurshid wants to take India back to the old permit raj days when the price of everything, from the proverbial pin to a plane, was decided by the government of the day. Mr Khurshid will of course be able to come up with some great examples to prove his point — CEOs, typically promoter-CEOs, who have got paid crores while their companies have sunk. You can also cite examples of CEOs, in the software space, who take home peanuts while delivering great value to shareholders quarter after quarter. It is also true that a lot more directors of listed companies got paid more than a crore rupees than they did last year. But this has to be viewed against a lot of things.
For one, Mr Khurshid has to look at the wealth created by the company and the position of influence it has got to, and the CEOs role in this. There can be little doubt that Reliance Industries Limited is where it is today only because of the hard work and vision put in by its founder and his family — Reliance is today the biggest producer of gas in the country, so if Mukesh Ambani pays himself well, what is the harm?
Or can anyone argue that Sun TV’s dominant share in the market is not directly linked with the promoters’ political clout and programming skills?
Let us not forget that all these promoter-CEOs are also professionals and can choose to work anywhere in the world. They would get equally handsome salaries if they were to work for any top-notch MNC firm.
Sanjiv Chauhan, New Delhi
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