CEOs raking in more moolah than companies’ promoters. Here’s why

On the flip side of debate on promoters taking more salaries than professional CEOs, few progressive family-owned businesses have started rewarding CEOs with salaries higher than promoters.

Few are of the belief that in changing business environment, promoters should not expect whooping salaries and an organisation’s interest should be put forth.

Let’s consider Mahindra Group, where Anand Mahindra gets less salary than Pawan Goenka, who was elevated to executive director in September 2013.

Likewise, CEO Varun Berry's salary, which is Rs 4.71 crore in Britannia, edged past promoter Nusli Wadia's compensation of Rs 3.68 crore.

Reportedly, Vivek Gambhir, MD, Godrej Consumer (Rs 12.88 crore) earned almost as much as Chairman Adi Godrej (Rs 13.18 crore). Gambhir will most likely earn more than Godrej this financial year.

"Promoters should stop expecting fancy salaries and compensation packages in today's business environment. An organisation's interests should always come first.

Compensation offered to promoters should depend on the intrinsic value brought to the company," Harsh Mariwala, chairman of Marico, told Economic Times.

"Earlier when growth opportunities were limited, professionals had little choice but to accept what they got. Today, owing to higher mobility, a few forward-looking promoters are treating professionals in a fairer manner. This trend will grow in coming years," JN Gupta, founder chairman of proxy advisory firm, Stakeholders Empowerment Services, told ET.

It is worth mentioning, some promoters like Burmans of the Dabur group and Rahejas of Shopper's Stop do not draw any salary.

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