Recruitment/talent Acquisition, Career Counselling
Raj Kumar Hansdah
Shrm, Od, Hrd, Pms
Asso.prof.(commerce & Management) Pg
Soft Skill Trainer / Hr Consultant - India
Ceo And Md Of 3 Uk Based Mnc's
I do not believe that investors morale is boosted by such inappropriate hikes.
Investors are only after a return on their investment in the form of either dividends or a rise in the share price, so that that they can cash in on the profits.
Therefore, there is no such thing as Investor loyalty, investors will move to where gains can be made.
In fact, when CEO's are remunerated handsomely any further hikes are seen as potential loss of dividends, money that would otherwise go into the pockets of investors.
As an investor my morale is boosted when CEO pay is increased by the rate of inflation or thereabouts.
The reason, most often cited, is that the value of the CEO has risen, as in this case TCS revenue went up bu 14% against an industry average of 11%, as per the article.
By hiking the salary the board has reacted out of fear that the CEO will be poached by a competitor. In my opinion this fear is unqualified as most TCS competitors will have a different infrastructure, culture, strategy or even the resources to match those of TCS.
As TCS is a global organization, the fear of poaching is not restricted within India, this CEO would be in demand worldwide; The CEO of Pepsi comes to mind !!
Whilst external stakeholder are not the concern of HR (it is the concern of the organizations publicity and media relations department), internal stakeholders are a different matter.
HR will hear of grumblings, particularly when increments are in single percentage figures, if at all.
However, it will all die down after a couple of weeks, and it will be back to business as usual....... until the next CEO hike !!
8th June 2013 From United Kingdom, Barrow
Like Harsh mentioned, Stock/Trading conditions may not be affected very much by this measure--maybe for a short while at the most.
However, purely from the HR perspective, it would be MORE interesting and, I guess, appropriate, to checkout IF the same largesse has been doled out to the general-grade employees. After all, TCS is what it is today due to the WHOLE TEAM......right from the junior-most employee to the CEO [like it's for any & every Organization]--NOT JUST due to the CEO or a few of the Top honchos.
If the rest of the staff have been given the standard single-digit Hikes--being given the usual reasons of the poor IT industry situation, etc--then that reminds me of the abnormal AND indecent Hikes the US Companies that were the cause for the 2008 Bust [which eventually needed Federal Financial Support for survival] gave their CEOs soon after the Federal funds came in, that lead to even the newly elected President Obama to react with abhorence . Except that in the case of TCS, it would be at the expense of the foot soldiers.
If, however, the rest of the staff ALSO DID GET SIMILAR GRAND HIKES [if not ~50%], I think we ought to congratulate & appreciate the TCS Management/Board for laying the foundation for SUCH AN equitable distribution of the Fruits of Collective Labor in the Indian IT industry.
8th June 2013 From India, Hyderabad
A company is not a one-man show unless its like the Virgin Group (with a charismatic Richard Branson driving the business) or like flamboyant Dr. Mallaya's companies (unfortunately KFA can not even pay overdue salaries to its employees); to name a few. Surprisingly; even family run companies have not showered such largesses on their CEO's.
I think its bad for business, at the end of the day !!
8th June 2013 From India, Delhi
To add further to this topic/issue, DOES THIS INDICATE A SWITCH in the generally known & understood Tata Mindset?
Meaning, is the famous & well-known positive mindset of the Tata Group/Name undergoing a SUBTLE BUT SURE CHANGE after the change of guard @ the Top of the Tata Empire?
I recollect the very positive & rarely exhibited Tata Mindset of 'Taking Care' JUST BECAUSE THAT'S THE RIGHT THING, AND NOT for any name/fame/profit-motive just after the 26/11 Terrorist attacks in Mumbai. I think this was posted in CiteHR too earlier.
Everyone, WITHOUT EXCEPTION, who was around the Taj Hotel during the attacks & suffered damage & loss of livelihood--including the roadside Chaiwala guys, Chatwalas, etc--were ALL SUPPORTED by the Tata Group in terms of financial & material support to get back on their feet ASAP. All this when the Tata Group DIDN'T REALLY HAVE TO DO IT, since NONE were even remotely related to the Taj Hotel [by some counts, they were even viewed as 'dirty' neighbors by the affluent]---frankly, had it been any other Group, including some very well-known ones, they would have conveniently passed it on to the Government OR @ Best, taken good care to publicize that they did this & that.
Vis-a-vis this way of thinking & doing, what happened @ TCS does indicate a 180deg change in orientation/approach. I do hope I am wrong.
8th June 2013 From India, Hyderabad
#AnonymousI work as an expatriate in a large multinational company and am an Indian and by virtue of my position as both an employee in a senior position which influences decision making on my Organisation, and as an office bearer in NRI association, I am privy to major investment decisions in India by major corporations located in the country that I am based on. The mood of the investors is totally negative towards India. Just imagine its over 10 years and neither land has been provided nor clearances have been given to major steel producers like Posco. Mittal's have withdrawn because even after 10 years, final clearances have not come in. And Mittal's being Indian origin owners of a British company brought in emotions along with investment. Many manufacturers are relocating their investments into countries like Indonesia and other south East Asian countries like Vietnam, Phillipines, Thailand etc. the growth rates that India has slid into from over 8% in 2006 to @ 4% goes to prove this, while the south eastern countries, especially Indonesia has grown from @4.5% to over 6.5% shows the shift. Political instability and uncertainty of applicability of laws indicate this. The global investors were closely watching the Vodafone case. After the Supreme Court gives a judgement on the applicability of the laws, the parliament amends it to suit the personal vendetta that Pranab Mukherjee desired to exert against Vodafone resulting in lots of investments being diverted to other countries.
One might say India cannot be ignored on account of its population. But the fact remains that India has limited capacities and these investments come in to satisfy the demand. In case demand is more than supply on account of lack of investments, India will have to import from countries like South East countries where investment is going into and lose precious foreign exchange. Added to these woes are political agendas like Singur which drive out investments. While Mamta drove out Tata's, the local community is facing starvation on account of their land gone and no jobs.
And India is not doing anything to protect brain drain. US is coming out with its new immigration policy which will facilitate Science and Technology graduates to to obtain green cards the moment they graduate. Already the IT industry has facilitated a brain drain and this will further add to it. Chinese have addressed this very smartly from moving away from labour intensive manufacturing such as Textile, Garments etc to high end manufacturing and this ensures better pay and better quality of life. And this results in Chiba retaining their talent. While the textile and Garment industries gave moved to India leading to low income levels for the majority.
What India requires today is a vibrant industrial policy and a government with full mandate so that it can govern with no qualms about being thrown out. Or we need to move to a presidential form of Government so that politicians do not hijack the country to suit their personal agendas and deter investments.
9th June 2013 From Indonesia, Jakarta
It is well-written; balanced, analytical and deals with vital issues facing our country.
About TCS and the Tata philosophy I would like to believe that latter always endures as the guiding philosophy of the industrialized economy; and the TCS incident is just an aberration or an exception.
9th June 2013 From India, Delhi
I in one way appreciate the sentiments expressed by our overseas friend and followed by other experts. But I should say we should look at the other side of the coin. As you all aware projects' approvals are influenced by political, economical, regional equations and other matters such as kick bag(ck)s etc. But on the other hand if we look at impartially, other factors like environment, local social issues etc. involved (as cited in some of the cases) we could very well understand the complexity of these cases. We cannot be bogged down only by looking at the figs like 4.5%, 6,8% etc. You know this has been influenced by lesser growth seen in organised sector whose bosses are billionaires. Are we worried why their Net Worth has fallen by a few millions compared to last year or they are dropped down few places in Forbes top 100 wealthiers ? These figs. are computed, as you know not only on the industrial growth but other factors accounting for GDP like growth in agriculture etc. where other associated issues are there like monsoon failures through out the country last year etc. Who are bothering about a 1/2 a billion village labourers who are languishing in remote villages ? Do you have the count of farmers committed suicide of crop failures, not able to repay the debts etc. ? Our botheration should be addressed to the plight of these millions and better not to worry too much about a few lakhs gone abroad. But you also know special flights are sent to bring back unlicenced workers stranded in overseas countries within a few hours they are raised in media and nothing is done about thousands illegally detained in Sri Lankan and Pakistani prisons. Why this double standard ?
Re: Brain drain. Everyone is aware the govt. and its policies are not aimed at exporting brains. They are going on their own for making faster bugs braving risks associated with it. For a population of over 1.25 billion how much the organised sector can cater ? Why only to blame the country ?
I'm not sounding what are all said is wrong but it should be read with if's and but's. India is India, things can be changed only by revolutions and not by amendments to acts and laws.We know the history of other countries where revolutions have changed many, one such a thing is due in India as we have seen none ( independence struggles cannot be counted under this category).
10th June 2013 From India, Bangalore
India is on a downward spiral, not because of the Corporate s or industry or farmers or the monsoon etc. But because Indian politicians have no VISION., unlike, Indonesia, Vietnam, Singapore, China and now even Burma. Indian politicians can only pay lip service and dole out laptops, blankets and sari's to maintain their vote banks made up of the poor millions.
I am often told that the Governments work is hampered because it is a coalition, what nonsense ! There are coalitions all over the world, including the UK, where the good of the Country and its people come first and pockets are lined afterwards.
When a Country takes years, if not decades to deliver justice to the people, when promises of compensations never materialize, when positions of power are given to family members; when Industry and entrepreneurs are ignored. When foreign troops incur (and some six weeks later are still there); when scams are a weekly occurrence, ..... then the Netha's have failed;
Government of the people, by the people, for the people? NOT in Incredible India.
So, I for one do blame the Country or rather its Incredible politicians.
My rant is not to bash India and what I have said does hurt the heart.
Jai Hind !
10th June 2013 From United Kingdom, Barrow
I really liked the way you guys have put up your views. When it comes to the growth and development of our country, everything comes to politics. Itís very easy to blame politics or ministers for that matter but one of the most important things which most of the times gets missed is the diversity in our country.
If you study the culture of Japan you would understand that it is not just a country itís a family, there is only one religion and that is something which hold them so strong in the world. It does not have natural resources nor it has huge population what it but it has is unity, likeness. This is very very important for any country to grow.
I love my country and I am proud of it, but then there is other side of India also, in which there are many religions and many cultures which do along with each other, why you think these political leaders win their sits. Itís more because of favoritism to a particular religion rather than development or anything else.
I know this could not be rectified in a day but then at least we can stop this practice of favoritism at our end because unless and until we practice this, it would be difficult to convince other.
10th June 2013
11th June 2013 From India
When the business goes DOWNHILL..... the first affected are the ORDINARY EMPLOYEES !!!!
They are AXED first in the name of Downsizing and attempts to make the company lean and competitive. Before that they have to go through bad patches of non-payment of over-due salaries and salary-reductions.
I have read reports of Kingfisher Airlines employees not getting salaries for months together; but yet to read any reports about the CEO's and senior executive facing hardships.
Your ARGUMENT is EXACTLY what paves the way for giving Obscene Salary Hikes to CEOs !!!
What is so special if the Industry as a whole performs at 11% and a company performs at 14% - just 3 percentage points higher. The average of 11 itself signifies that many more companies must have performed on a higher side too, to average out several low performing companies.
11th June 2013 From India, Delhi
I would think "zillions" time before thinking of hiking the salary by 50%.Well, It's tough but not impossible. And when we come to the CEO of such top companies, I guess they deserve it. :)
11th June 2013 From India, Noida
A simple google search will show similar announcements for the CEO's salary, across the world and there by the news about the share price catapult and business growth.
What does such an action stand for beyond the hogwash and PR effort?
I am grateful to the in-depth understanding shared and insights on the Indian Business scenario.
11th June 2013 From India, Mumbai
This is for those interested to know little more about the progress of emerging countries.
Chart of the day (Pl.see the attachment)
"There is no doubt that GDP growth both in India and China has considerably slowed down. In India, growth in FY13 was the lowest in a decade. But when compared to their peers in both the developed and the emerging world, they have still done better. Indeed, as today's chart shows, China and India lead the pack with respect to growth in the March 2013 quarter. Having said that, overall this still does not bode well for the global economy. Growth in the developed world still remains weak and it will be a while before there is a recovery. It was hoped that healthy growth in the emerging economies would rebalance overall global growth. But judging by the performance in these countries, that alas does not seem to be the case. "
Data Source: The Economist
12th June 2013 From India, Bangalore
#AnonymousThanks for the article. Please see below an extract from your article, which clearly states that India needs to address its policies.
In a landmark decision, the Indian government had approved FDI in retail. But foreign investors do not appear to be too keen to speed up their investments in the country. Crisil has stated in a report that it does not expect foreign retailers to make any big ticket investments for at least 2 to 3 years. The reason for this is the rules laid down for FDI. Retailers have to make greenfield investments of at least US$ 100 m as a condition for entry into India. Given the depressed macroeconomic scenario, most companies are curbing or cutting back on their investment plans. Therefore making such an investment right away may not be too feasible. Moreover India itself is battling its own issues like political uncertainty, slowing economic growth, etc. In such circumstances, investors are expected to be skeptical about parking their funds in the country. This is something we have been writing about since the FDI policy was approved. India has to effectively deal with its policies and reform them to make the investment environment conducive. Otherwise simply approving FDI would not really help.
12th June 2013 From Indonesia, Jakarta
I am not sure of your 'definition' of comparision.
I don't think this an issue of comparision--it's one of EQUAL treatment within the Organization.
Would the CEO [or for that matter any higher official] be able to do anything on his/her own without the support/effort of those down-the-line?
Equally well, those down-the-line would ALSO NOT be able to do much without the guidance/support of the higher-ups.
Like the American slang Saying goes: 'It takes two to tango'. So it INVARIABLY IS & WILL ALWAYS BE a Collective effort for ANY Organization. Each will have to give his/her Best, relative to his/her role & responsibilities--that's when the Organization, as a whole, thrives & grows.
25th June 2013 From India, Hyderabad