New Delhi: Having launched an austerity drive
to check public expenditure, the government has advised India
Inc to refrain from doling out "vulgar" salaries to CEOs.
"I think when we are working on this (austerity), we can
hardly say that we (will) shut our eyes on what salary the
CEOs are going to take," Corporate Affairs Minister Salman
Khurshid told a news agency when asked how the government intends to
control salaries of CEOs which at times appear vulgar.
Pointing out that salaries of CEOs should be decided by
shareholders, he said, "I don't think anyone in India today,
in politics or outside politics ... has reached the level of
liberalism where vulgarity is also a fundamental right.
"Minister should not be judging who deserves what salary.
We are moving away from control to regulation. But it doesn't
mean that you are going to be completely free," he said.
The issue regarding remuneration of company CEOs will be
debated by the Parliamentary Standing Committee, which is
scrutinising the provisions of the new Companies Bill tabled
in the Lok Sabha in August, he said.
"Let's get the opinion of the standing committee (on the
Bill), then we will move forward," he said, pointing out that
"it's now before the same Parliament that has supported this
attitude of austerity ... Let us see what their views are."
The annual renumeration of some CEOs work out to be Rs
50 crore, which is more than 12,500 times the per capita
income in the country.
Under the present Companies Act, companies have to take
approval of the government before raising salaries of
directors, if the increase is beyond a threshold.
Noting that the issue of CEO's pay packages cannot go
unnoticed, Khurshid said, "Prime Minister's indication to
industry (has to be taken)... with paramount importance today,
particularly we are trying to promote, inculcate a culture of
austerity.
"Nothing is to been in isolation. We have to see on what
accountability and what responsibility is to be imposed on
directors, CEOs of companies. We still haven't taken a final
view on whether two persons can be taken as chairpersons and
managing directors," the Minister said.
Remuneration should commensurate with the qualifications
of the individuals and time they spent, he said, adding there
should be transparency in the working of various committees of
a company.
"The bottom-line should be the shareholders, but the
shareholders are not suppose to decide things blind.
Shareholders also must decide in certain context after
particular information is made available to them," he added.
Referring to the austerity drive of the government, the
Minister said, "Our programme is not only about rules alone.
Our austerity programme is about an attitude -- a culture of
non-vulgarity, of posterity, of simplicity and it has nothing
to with the tickets that you buy, the seat in which you
travel.
"It is also to do with how you conduct yourself, how
you behave, what you wear, what you do, what you speak and
eat. It must be a pervasive culture. You are travelling
economy class but you go and have a bash where people are
going hungry, is in think immoral," he added.
The UPA leadership is telling people to inculcate a
temperament of austerity and simplicity, he said, adding "the
rules not just for 10 months ... they are only indicative.
This is something of a permanent nature."
The government as part of the austerity drive asked the
ministries to refrain from organising conferences in five-star
hotels, avail concessional air tickets being offered by Air
India and and ensure 5 to 10 per cent cut in non-plan
expenditure over what has been approved in the budget for
2009-10.
Bureau Report
First Published: Sunday, October 04, 2009, 12:07