The world's largest spirits maker Diageo Plc has proposed an annual pay package of up to 10.9 million British pound (about Rs 105 crore) for its newly appointed, Indian-origin, CEO Ivan Menezes.
Menezes, who has been with UK-headquartered Diageo for about 13 years, was paid total remuneration of 7.8 million pounds (Rs 75 crore) in the last financial year ended June 30, 2013 when he served as Chief Operating Officer.
Upon his promotion as CEO with effect from July 1, he has been given an 8.6 per cent hike in base salary to one million pounds (about Rs 9.6 crore) and would be entitled to further benefits totalling up to 9.9 million pounds (Rs 95 crore) a year, Diageo said in its latest annual regulatory filing.
Diageo, which owns brands like Johnnie Walker, Smirnoff, Baileys and Guinness, recently acquired a significant stake in India's leading liquor firm United Spirits from Vijay Mallya- led UB group in a deal worth over USD 2 billion.
53-year-old Menezes, who studied at premier Indian educational institutions like St Stephen's College and IIM-Ahmedabad besides Kellogg School of Management in the US, is said to have been instrumental in the United Spirits deal.
Prior to joining Diageo, Menezes held senior positions with giants like Nestle, Booz Allen Hamilton and Whirlpool.
While Diageo said that "Menezes' salary has been positioned below median to reflect the fact that he is new to the Chief Executive role", his total package is much higher than the average salary earned by CEOs in India and abroad.
As per a latest managerial remuneration report by the Institutional Investors Advisory Services (IIAS) last month, the average CEO salary for India's biggest 500 companies in the last fiscal stood at Rs 3.6 crore, while the sale for the biggest 500 companies in the US was Rs 28 crore.
As Diageo CEO, Menezes would get a base salary of one million pound, and would be eligible for awards under the company's Annual Incentive Plan (AIP), Performance Share Plan (PSP), Senior Executive Share Option Plan (SESOP) and Pension payments.
Under the AIP, he can get up to 100 per cent of salary for "on-target performance" and a maximum of 200 per cent of salary payable for outstanding performance -- which could take this component to up to two million British pounds.
The maximum annual award under PSP can be 375 per cent of the base salary (up to 3.75 million pounds), while Menezes would also be eligible for a maximum annual award of 375 of base salary under SESOP (up to USD 3.75 million).
Besides, Diageo would make an annual contribution of 40 per cent of his base salary to an executive retirement plan, taking his total package to up to 10.9 million Pounds.
