Regardless of what Company Affairs Minister Salman Khursheed might say, executive compensation is a non-issue in this country. Straight off, anybody can tell you most CEOs and other executives in this country make much less than their global counterparts, even if you applied the purchasing power parity. Many make a crore, which is only $220,000 – an income enjoyed by over 10 million US households. Most, perhaps, make less than my favourite benchmark – the $1.2 million (Rs. 6 crore) Mr. John Thain, the ousted CEO of Merrill Lynch, recently spent merely to redesign his office and bathroom.

Executive compensation is a disgrace in the U.S. It is nothing like that here. Most Indian executives earn modest amounts of money, have relatively modest lifestyles, rarely flaunt their wealth in public, and plough in most of their wealth into businesses. They might travel business class, or even first class, as Infosys’ N R Narayana Murthy admitted on TV, but that is because it is a necessity. Without the comfort, you can’t expect to be fully productive. 

The amount of money the Ambanis make may seem obscene but are below par in the modern global capitalist system. For example, the total compensation paid to Mukesh Ambani, head of Reliance Industries, was only 0.29% of the profits. Other than his new house being built, Mukesh is not known for any form of exhibitionism. His brother Anil spurned most salaries this year but still took home Rs. 400 million (less than US$10 million), but the amount represents only 0.48% of the profits his group company earned. Now, he might be a tad guilty of exhibiting his wealth but is nowhere near the excesses of Corporate America.

If Khursheed needed to raise the subject, he could at least have zeroed in on specific issues that cry out for attention, rather than raise the bogey of government control over executive compensation – a realm that is best left to shareholders.

Executive compensation is an issue in companies that are tightly controlled by promoters, and meet few corporate governance norms. For example, Kalanidhi Maran and his wife Kavery each was paid Rs. 370 million by Sun TV, the media group in which the DMK, a constituent of the UPA government, has a strong hand. Khursheed would do well to address such egregious payments because the Marans appear to have rewarded themselves handsomely on the strength of the 77% stake they hold in the company. It is not as if the shareholders overwhelmingly approved the measure or saw such great value in their leadership to offer such generous rewards.

Another issue is transparency. The total compensation paid to corporate executives is deliberately designed to hide the real figure and any government regulations that force greater clarity are welcome. 

Finally, Mr Khursheed, you would do well to remember that the list of CEOs with decent, as opposed to vulgar, lifestyles is almost certainly longer than a list of politicians with ill-gotten wealth. Do you have any idea how many ministers, ex-ministers, MPs and ex-MPs, and MPLA and ex-MLAs we have in this country?