The Hindu Business Line : Rising Re: Little impact on CXO salaries

Bangalore, Oct.11 Dollar salaries in the country that went through the roof a couple of years ago are yet to be impacted by the rising rupee. An 11 per cent dip in dollar value may seem too small to renegotiate old agreements, but new contracts being signed in the next couple of months will get impacted, say executive search firms. Expats and NRIs on contract assignments in the country have adopted a ‘wait and watch’ strategy before considering renegotiations on their salaries. CXOs who moved into the country a couple of years ago negotiated their salaries when dollar was reigning at Rs 45 and there is no ‘visible move’ yet to rework salary packages, even with an 11 per cent dip in the rupee-dollar conversion rates.

“That’s because compensation levels have been going up in the last 24 months and the cost arbitrage factor still remains favourable towards India,” says Mr Kris Lakshmikanth, Managing Director, The Head Hunters India. But there have been some murmurs from executives coming into the country now. Mr Lakshmikanth gives the instance of a CFO who has negotiated an annual salary of $2.5 million for a fixed conversion rate of Rs 40 to a dollar. “This is because some of them receive part of their compensation as rupee salary,” he explains.

Mr Tapash Sengupta, Managing Director, CHR Global HR Services, says it does take a lot of persuasion even at $2.5 million to make an NRI accept a job. “But the lifestyle advantages that the country offers compensates for the 11 per cent dip in dollar value.”

The differential at this point may be too small to renegotiate, agrees Mr Sunit Mehra, Country Manager, Hunt Partners India, a global CEO and Board search firm. But new contracts would be negotiated at different rates. “Those whose contracts are very old (at Rs 42 to a dollar) would need to renegotiate,” he says. He points out that globally, many companies are updating cost of living indices for exchange rate changes quarterly and some even monthly, a trend that could be seen in the country soon.

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