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
There was a time when the FMCG companies ignores rural market, they took no any interest to produced or sell products in rural market in India. It was the initial stage of FMCG companies in India. As per as the time had passed, the strategy and marketing style of FMCG companies had been changed.
Background of the study:-
In 1970, Nirma was the first FMCG Company to initiate and produced goods according to rural consumers. In the early 1970s, when Nirma washing powder was introduced in the low-income market, Hindustan Lever Limited reacted in a way typical of many multinational companies. However, Nirma’s entry changed the whole Indian FMCG scene .It became a great success story and laid the roadmap for others to follow. MNC’s like HLL, which were sitting pretty till then, woke up to new market realities and noticed the latent rural potential of India. 1983, C K Ranganathan started selling shampoos in a sachet with an investment of Rs 15,000 and dared to take on the multinationals, Lever and P&G, the unquestioned leaders in that segment. . He targeted rural and small-town consumers who used soaps to wash their hair. He introduced the sachet at 90 paise and then reduced it to 50-paise. And that’s when the multinationals sat up and noticed him.Sales zoomed from 35,000 sachets to 12 lakhs. Initally they took any sachet, but after three months they restricted to Chik sachets.
Now at the present time, rural market is one of the best opportunity and focusing sector for the major FMCG companies in India. Each and every company is set to invest a huge capital for competition in rural market. According to the Federation of Indian Chambers of Commerce and Industry, the number of rural households using FMCG products has grown from 136 million in 2004 to 143 million in 2007, a clear indication that rural consumers are shifting from commodities to branded products. Urban consumers, on other hand, could go slow on FMCG expenses, thanks for inflation spiral, rise in fuel cost and costlier credit. Evidence suggests that for the first time, the rural market has grown faster than the urban market in key product categories in April-May 2008, the latest months for which such information is available, according to market research firm AC Nielsen.
Need for the Study:-
In those days, the rural market is the one of the best opportunity for the FMCG sector in the India. It is more wide and less competitive market for the FMCG. As the income level of the rural consumers increasing, the demand of FMCG is increasing continuously. The various need of the study is given as follows:-
Ø To determine the raising demand of FMCG products in rural area.
Ø Know about the different choices of rural consumers.
Ø
Definition of the Problem:-
The study of opportunity for FMCG products in the rural market is a sum total of different analytical survey of different FMCG products in the rural area. In one sense, we can say that it is determination of how much market captured by different FMCG companies.
Scope of study:-
With a population of 1 bn people, India is a big market for FMCG companies. Around 70% of the total households in India reside in the rural areas. The total number of rural households is expected to rise from 135 m in 2002 to 153 m in 2010, which represents the largest potential market in the world.
Rural and urban potential
Urban
Rural
Population 2001-02 (m household)
53
135
Population 2009-10 (m household)
69
153
% Distribution (2001-02)
28
72
Market (Towns/Villages)
3,768
627,000
Source: Statistical Outline of India (2001-02), NCAER
An average Indian spends around 40% of his income on groceries and 8% on personal care products. A larger part of the total spending pie along with a large base (in terms of population) makes India one of the largest FMCG markets.
Changing lifestyles: Rising per capita income, increased literacy and rapid urbanisation have caused rapid growth and change in demand patterns. The rising aspiration levels, increase in spending power has led to a change in the consumption pattern .
Low penetration and low per capita consumption: Due to the large size of the market, penetration level in most product categories like jams, toothpaste, skin care, hair wash etc. in India is low. This is more visible when comparison is done between the rural and the urban areas. The average consumption by rural households is much lower than their urban counterparts. Existence of unsaturated markets provides an excellent opportunity for the industry players in the form of a vastly untapped market as the income rises.
Rural market shows a good improvement. In the presence of some product categories like, toilet soap, detergent bar, washing powder etc, it is same as in the urban level. Rural market is also improving in the other products category