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Over three-fourth of senior business leaders surveyed in India believe top executives at large public companies are paid “too much”, says a report.
Indian businesses strongly support greater shareholder involvement in setting CEO compensation and would rather opt for more transparent machinery, according to Grant Thornton International Business Report.
About 70 per cent of Indian business leaders (higher than global average of 67 per cent) believe shareholders should have greater involvement in remuneration policy for senior executives at large public companies, a survey in the report said.
“As much as 78 per cent believe that senior executives are paid too much,” it added.
“Senior executives have to clearly demonstrate performance, and tangible, measurable value, to the ones who matter most — the shareholders,” Grant Thornton India Partner and Practice Leader, Business Advisory Services Vinamra Shastri said.
With respect to Indian executive compensation Grant Thornton, however, said “the proportion of family-owned and family-managed businesses is larger in India. Hence, the opinion of the value that professionals bring, and the rewards they subsequently get, may be lower in some cases.”
According to the survey, a significant majority of shareholders — 89 per cent — want executive remuneration at public companies to be closely linked to performance targets.
“In light of executive mismanagement of finances, and negligence of shareholder interest, there is an inevitable and often outspoken demand for greater transparency,” Shastri said.
The survey was conducted by Experian in May-June 2012 as part of the Grant Thornton International Business Report, a quarterly global business survey of 3,000 public and private businesses. In India, around 100 businesses participated in this survey.
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