WHAT IS THE REASON OF UNEMPLOYMENT, RECESSION OR REMUNERATION OF CEO

CEO: - AN EVERGREEN PACKAGE

Everybody knows about the evergreen tree, it is a tree which contains leaves an flowers in al seasons. I think that there is a similar relation between the evergreen tree and a salary package/remuneration of a CEO of a company. In any period of economy, the salary of CEO remains unchanged. It is evergreen in any period.

The present time is very tough time for the whole business world. There is recession and financial cricies spread everywhere. In this time such a large company like LEHMAN BROTHER and some others has been bankrupted. Many of the MNC’c goes on to losses, they have no money to provide salary to there employees. As the result , the companies starting to fire the employees all the world. Such a reputed company like kingfisher and Ford motors terminates thousand of their employees. The all the door are closed for fresher in the companies.

As given above about the financial conditions about the companies. They terminate their employees due to lack of more money, losses, financial cricies etc. But if we look upon the remuneration package of the CEO’s and other official’s of the companies, we will find a different situation. If we left some of the CEO’s, we will find that every CEO of the big company takes remuneration much more than it require.

After taking the example of remuneration of some famous business personalities we will find the story behind the screen. Mukesh Ambani takes home Rs. 44.02 crore as his remuneration, which is 1000 times more than an average worker’s compensation. Sun TV’s Kalanithi Maran takes 32.41 crore as his salary. In this race, small Ambani is not more far from his elder brother Mukesh and takes Rs. 30.03 crore as his remuneration.Malvinder Mohan Sing of Ranbaxy, takes Rs. 19-58 core , S.B. Mittal of Airtel takes Rs. 19.555 crore, Nveen Jindal(jindal steel) – Rs. 16-83 crore, Sajjan Jindal (JSW steel) – Rs. 16.73 crore Pawan Munjal (Hero Honda)- 15.73 crore, and Onkar S. Kanwar of Cadila healthcare takes Rs. 15.43 crore are the India’s top 10 highest paid CEO’S. There remunerations are about as 500 times more than the salary of an average worker. The highest paid CEO of US in 2007 was Larry Ellison of Oracle Corporation at $ 230 million. In 2007, the top highest paid CEO of US takes home a combined compensation of $ 673 million. The average annual compensation for fortunes top 384 companies among its 500 top companies are $ 10.8 million in 2007 that was more than 345 times of an average US worker.

It is not limited to India and US. It s the condition of whole world. CEO’s in Japan and Germany takes home about 11 or 12 times the compensation paid to the median workers in those countries. The number in the France is 15 times.

This is the whole story about the remuneration of the top most CEO’s of the world. One side they said that they have no mony to pay for the salary to the employees and terminate them, but on the other side, they take unbelievable remuneration for themselves.

Inspite of all of these, there are some great CEO’s are remain who has scarifies their salary for maintaining the balance in salary package for their employees. Steve Jobs of Apple Inc. continues to take $1 as his salary; same strategy has been adopted by Robert Nardilli and Chrysler. In India, Dilip Sanghvi of Sun farma takes only 1.12 crore as his salary followed by Glen Saldhner of Glenmark farma(Rs.1.74 crore) and T.V. Ramanathan of Exide Industries(Rs.1.42 crore) . Excluding them, there are also some other personalities like, P.J.Nayak of Axis bank, Rahul Patel of Syntex, Uday Kotak, Bhaskar Bhatt, and Ajim H.Premjee has takes reasonable salary package.

If we look of the figures of these low lower incomes CEO’s we will find that this figure is 1/10 of all over the CEO of the world, which is so small. So, now some questions arises that are – Is this figure is sufficient?, Who is responsible for job cuttings-recession or the highest remuneration of CEO’s? I like to get answers of these questions from you.


At last I am not going to give many suggestions or advice. I just want to request our govt./company low board to making of a certain limit for the maximum remuneration or salary of a CEO of a company.

THANK YOU…………………………

PRAVIN TRIPATHI
PGDM 1ST YEAR
INSTITUTE OF MANAGEMENT EDUCATION.
GHAZIABAD


E-mail ID—pravin0072008@indiatimes.com
Pravintripathi64@yahoo.co.in