Recently there is some discussions on high salaries paid to corporate executives and debate on regulating salaries. Corporates raised hue and cry on attempts to regulate but questions that shareholders need to ask whether these highly paid executives bring value to their ( yes their ) company.
One striking example in recent times is Sun TV Network. It paid its MD & Joint MD (Wife of MD), Salary of Rs.37.08crores(Rs.370.8million) each for Fy09. This is as good as 21.8% of entire year's profits. Wonderful super executives of India. Does anyone know value brought in for shareholders by these two. super-executives. If the company can fire these two it will immediately add 20 odd % to its bottom line and I don't think any harm to shareholders. You can get better MD for that kind of job at 1-2crore. And if you read list of top earners in India, it will be full of controlling shareholder and their wives, sons, daughters, in-laws. I use word controlling shareholders, because in truth they are just that NOT owner as media of Page3 analysts will like us to believe and they are treated as owners by government also, which they are not.
After a phase of over regulation India has swung to other extreme. No regulation at all. And that has happened before institutions have been built like in US to counter these forces. We need a corporate democracy movement similar our voting democracy where we through out these Laloos, Mulayams, Paswans and Co after 5years. These promoter- owners running publicly listed companies as their proprietorship are no different from those looters of public money as they steal public wealth of shareholders.
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