According to an ET analysis, the chairman & managing director (CMD) of a public sector oil major will now be earning a respectable Rs 5,76,000 per month, thanks to the pay revision bonanza, factoring in a 200% performance-related bonus.
That means a huge leap of 450% over his current monthly salary of Rs 1,02,500 per month and will put him (pay-wise at least) ahead of Infosys chairman NR Narayana Murthy, who earns Rs 4,16,666 per month (as on March 2008). He, however, would still be far behind Wipro chairman Azim H Premji’s monthly salary of Rs 10,95,726.
Even so, this salary hike is a representative picture of the new pay scenario in the higher echelons of the public sector companies. At present, CMDs of public sector undertakings (PSU) draw a basic pay in the range of Rs 27,750-Rs 31,500. They are also entitled to get 68.8% of basic pay as dearness allowance (DA), 30% house rent allowance (HRA), 30% statutory allowance, 30% fitment benefit and 50% other allowances. So, for example, if a PSU CMD is at the upper-end of the basic salary bracket (Rs 31,500), his total emoluments, excluding the performance-related pay (PRP), will be Rs 97,272.
The PRP is taken from the 5% distributable profit, or profit after tax. And then there is the added sweetner that the salary revision carries, the retrospective effect. This means the CMD of a navratna PSU may get arrears of around Rs 20 lakh as well.
According to the ET analysis based on the figures as on March 31, 2008, the top earning CMDs of PSUs include NTPC’s Ram Sharan Sharma (Rs 1,62,145), Bhel’s K Ravi Kumar (Rs 1,61,285), Gail’s UD Choubey (Rs 1,56,666), IOC’s Sarthak Behuria (Rs 1,40,750), SAIL’s SK Roongta (Rs 1,34,024) and ONGC’s Radhey Shyam Sharma (Rs 1,02,500).
Clearly, while the market capitalisation of some of these PSUs are much higher than private sector companies, the salaries of their CMDs are much lower. Take the whopping difference in the paypackets of the bosses of telecom major Bharti...