News: Tribe of Indian CXO crorepatis grows
(TNN 03/04/2006) Hyderabad - There was a time, not very far back, when an annual salary of Rs 1 crore was unheard of and hence graced many a headline. Quite obviously, it is not such a rare phenomena today with the economy stepping on the gas, the Sensex breaching new barriers and corporate India pumping funds and charting mega expansion plans.
Not surprisingly, nobody grudges a fat pay packet to the CXO manning mammoth operations and chasing stretch targets. CXOs are top corporate executives who are the chiefs of their functions. Sceptics, however, fear that India would lose out on its cost arbitrage going by the unprecedented rise in salaries in some sectors. “It is like a bull entering the china shop” in sectors like retail, they say. On the other hand, optimists say that it is not management salaries alone that comprise costs. “There are ways to improve efficiency and billions of dollars worth of investment plans need an able person on the driving seat,” HR experts add.
According to wide-ranging views from HR experts, the number of CXOs earning the magical Rs 1 crore and more could be at least a few 100s to up to 5,000, depending on various parameters. While there are no precise or audited numbers available on the ‘crorepati’ CXOs, it is clear that this tribe is not so rare anymore. Amrita Nathani of Cornell International says, the basis of calculation of salaries has also changed. “Earlier , salaries were based on individual performance and targets achieved. But today, they are calculated on the basis of market potential. Salaries have doubled in many sectors,” she adds.
CXO salaries comprise several components like fixed, variable, target-linked , perks and stock options. HR experts peg the number of CXOs getting Rs 1 crore without stock options at 2,000. With salary benchmarks raised in India, there are global employees and returning Indians . Companies are not batting an eyelid to fork out $200,000 for CXOs. Companies project the huge savings potential that an Indian salary offers for those wishing to relocate to India.
Adecco Peopleone India managing director Ajit Issac feels that the upward salary spiral could prove detrimental to India’s cost advantage in the long-term . The sectors that have been called turbulent in terms of steep salary increases are retail, BPO/ITES and auto components. Ma Foi managing director K Pandiarajan says, “retail CXO salaries have seen doubling of growth. A typical CEO of a 1,000-seater BPO could attract Rs 65 lakh plus a performance pay of 30%. IT industry has been sober. Auto ancillary has sprung a surprise in the last few years. A CEO of a 500-600 strong auto component company will draw Rs 50 lakh. The HR industry itself, marked by acquisitions, is witnessing redefinition of salaries.”
Not surprisingly, nobody grudges a fat pay packet to the CXO manning mammoth operations and chasing stretch targets. CXOs are top corporate executives who are the chiefs of their functions. Sceptics, however, fear that India would lose out on its cost arbitrage going by the unprecedented rise in salaries in some sectors. “It is like a bull entering the china shop” in sectors like retail, they say. On the other hand, optimists say that it is not management salaries alone that comprise costs. “There are ways to improve efficiency and billions of dollars worth of investment plans need an able person on the driving seat,” HR experts add.
According to wide-ranging views from HR experts, the number of CXOs earning the magical Rs 1 crore and more could be at least a few 100s to up to 5,000, depending on various parameters. While there are no precise or audited numbers available on the ‘crorepati’ CXOs, it is clear that this tribe is not so rare anymore. Amrita Nathani of Cornell International says, the basis of calculation of salaries has also changed. “Earlier , salaries were based on individual performance and targets achieved. But today, they are calculated on the basis of market potential. Salaries have doubled in many sectors,” she adds.
CXO salaries comprise several components like fixed, variable, target-linked , perks and stock options. HR experts peg the number of CXOs getting Rs 1 crore without stock options at 2,000. With salary benchmarks raised in India, there are global employees and returning Indians . Companies are not batting an eyelid to fork out $200,000 for CXOs. Companies project the huge savings potential that an Indian salary offers for those wishing to relocate to India.
Adecco Peopleone India managing director Ajit Issac feels that the upward salary spiral could prove detrimental to India’s cost advantage in the long-term . The sectors that have been called turbulent in terms of steep salary increases are retail, BPO/ITES and auto components. Ma Foi managing director K Pandiarajan says, “retail CXO salaries have seen doubling of growth. A typical CEO of a 1,000-seater BPO could attract Rs 65 lakh plus a performance pay of 30%. IT industry has been sober. Auto ancillary has sprung a surprise in the last few years. A CEO of a 500-600 strong auto component company will draw Rs 50 lakh. The HR industry itself, marked by acquisitions, is witnessing redefinition of salaries.”
posted by InCar Group Press Room at 12:09
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