India Inc's next-gen rake in the moolah
- From Ambani's to Adanis, several generation-next leaders of India's leading family-run businesses have joined the crorepati club
- Many of these companies have begun giving hefty remuneration packages
From Ambani's to Adanis, several generation-next leaders of India's leading family-run businesses have joined the crorepati club when it comes to their salaries and other perks.
With a number of corporate houses promoting sons and daughters of their promoters to leadership positions, many of these companies have begun giving hefty remuneration packages to them for their "increased responsibilities" and "active involvement" in exploring new business opportunities.
Still, the annual pay of these next-generation leaders remains relatively low, as against the overall average payout of over Rs.20 crore for CEOs of India's top listed companies forming part of Sensex and only a fraction of the same in the US at close to $20 million (about Rs. 130 crore).
The Adani scion
A staggering debt of Rs 72,000 crores, has not stopped the Adani group from awarding its young heir-apparent Karan Advani. Industrialist Gautam Adani's son Karan, who was appointed CEO of Adani Ports and Special Economic Zone Ltd, did not draw any remuneration from the company for fiscal year 2015-16, but the board has approved an annual remuneration for him of up to Rs. 1.5 crore, including salary, perks and other benefits, with effect from September 1, 2016.
As chairman and managing director of the company, Gautam Adani got a total remuneration of Rs. 2.8 crore in 2015-16, while whole-time director Malay Mahadevia got Rs. 10.7 crore.
This comes at a time when the company's finances are being discussed in the Rajya Sabha. A JD(U) member Pawan Verma said in the Rajya Sabha earlier in May this year that its debt stands at Rs 72,000 crore.
Raising the issue during Zero Hour, Pawan Verma contended that PSU banks are influenced to give loan to the people who are not able to repay them. “PSU banks are owed about Rs 5 lakh crore by corporate houses and of this roughly Rs 1.4 lakh crore are owed by just five companies, which include Lanco, GVK, Suzlon Energy, Hindustan Construction Company and a certain company called the Adani Group and Adani Power,” he said.
“I don’t know what the relationship is of this government with this business house. I don’t even know if they know them, but the owner of this group (Gautam) Adani is seen everywhere the Prime Minister has gone, every country China, the UK, the US, Europe, Japan,” the JD(U) member said.
“This company has been given favours which are unimaginable. In Gujarat, their SEZ was approved inspite of the High Court strictures,” Verma member had said.
ADAG group's new prince
Anil Ambani's son Anmol, who was recently appointed as director on the board of the group's financial services arm Reliance Capital, could get a salary of Rs. 10 lakh per month. Reliance Capital will seek approval of its shareholders in the upcoming AGM on September 27 for various proposals, including Anmol Ambani's appointment as executive director for a period of five years as well as for the remuneration to be paid. In the shareholders' notice, the company said his salary would be Rs.10 lakh per month. In addition to the salary, perquisites and allowances, he will also be entitled to receive commissions.
This comes at a time when according to a report in The Hindu, the Anil Ambani-led Reliance Group owes close to Rs 1,21,000 crore of loans to the banks and had an annual interest liability of Rs 8,299 crore against earnings before income tax of Rs 9,848 crore. Thus not surprisingly the company has put its assets on sale. These include about 44,000 telecommunications towers (valued at Rs 22,000 crore) and optic fibre and related infrastructure (Rs 8,000 crore) from Reliance Communications (RCom), its flagship firm said the report.
Weighed down by about Rs 40,000 crore of debt, RCom has posted a loss of Rs 154 crore in FY14-15, and has continued to post losses in the first three quarters of FY 15-16, accumulating losses of over Rs 2000 crore until December 31, 2015; it is likely to end that fiscal with a net loss too. The company is valued at Rs 13,440 crore, less than a third of its total debts. However, RCom plans to reduce its debts to Rs 10,000 by selling Rs 30,000 crore of telecom assets.
At a time when the country's third-largest software services firm Wipro is looking at a muted growth its King and Prince are both following suit as Azim Premji's son Rishad who serves as chief strategy officer and executive director of the company's remuneration for 2015-16 stood at Rs. 2.15 crore. The same for his father was Rs. 2.17 crore, down from Rs. 4.78 crore in the fiscal year 2014-15. Earlier this year, Wipro posted a 6.7% decline in its net profit at Rs 2,059 crore for the quarter ended June 2016.The company had reported a net profit of Rs 2,207.4 crore in the year-ago period, Wipro said in a statement.Its total income from operations rose 10.7 per cent to Rs 13,697.6 crore for the said quarter, from Rs 12,370.6 crore in the April-June 2015 quarter.
According to a Mint report, chief executive officer Abidali Neemuchwala, the man Wipro hired last year from Tata Consultancy Services to boost growth, conceded that it will take at least three more quarters for some of the steps he has taken to bear fruit.
Wockhardt has disclosed a remuneration of Rs 1.32 crore for 2015-16 to its chairman Habil Khorakiwala, while the same for his sons Huzaifa (executive director) and Murtaza (managing director) stood at Rs. 1.328 crore each. His daugther Zahabiya Khorakiwala runs Wockhardt Hospitals, but her salary details could not be ascertained.
At another pharma major Cipla, Samina Vaziralli, niece of chairman Y K Hamied, got a total remuneration of Rs. 2.47 crore as executive director in 2015-16. She was made executive director in July last year. She became executive vice chairman with effect from September 1, 2016. Chairman Y K Hamied said in his message to shareholders, "As we see a transformation to the next generation of the Hamied family, "I have no doubt that in Samina Vaziralli we have a trustee who will preserve, inspire and enhance the spirit that we call Cipla."
Future Group's future
At Future Consumer Enterprise, Kishore Biyani's daugther Ashni's total remuneration for 2015-16 as whole-time director was Rs. 69.09 lakh, which was same in preceding year.
The new 'wind' beneath Suzlon's wings
In case of Suzlon Energy, Tulsi Tanti's daughter Nidhi was paid a remuneration of Rs. 25 lakh in fiscal year 2015-16, up from Rs. 12 lakh in 2014-15. In comparison, Tulsi Tanti's total remuneration stood at Rs. 1.58 crore for the last fiscal year.
DLF's new deal
At DLF, chairman K P Singh's remuneration stood at Rs. 4.37 crore while that of his son and vice chairman Rajiv Singh was Rs. 4.42 crore in 2015-16.
Pia Singh, daughter of K P Singh, was Rs. 29.6 lakh for her role as whole-time director till May 20, 2015, after which she became a non-executive director (remuneration of Rs. 33 lakh).
In its annual report, DLF has also disclosed as "salary and wages" totalling Rs. 1.97 crore for Renuka Talwar, also daughter of K P Singh.