Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Wednesday 8 July 2015

Median Salary


Dear Amitabh ,


You may like my today's blog

regards,

hemen

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Median   Salary  ?


In a company , median salary is where half the number of employees are getting more and the other half are getting less than that salary number


Till a few years ago , all limited companies had to get the annual salary of their top management ( directors ) , approved by the Department of Company Affairs .


 And while approving , DCA applied some internal " guidelines " ( - who should earn how much, and no more  ! )


Companies learned to guess , as to what figure would pass the muster  !

 
I believe , nowadays , this is left for the shareholders to decide


A few years earlier , companies were required to publish in their Annual Reports , a section called " Employees Details "


In this section , they were required to publish full details ( Name / Birth Date Edu.  Qualification / Date of joining / Current Exp / Past Exp / current salary etc ) of all the employees drawing more than Rs 3000/- per month



In a few years time , in case of a few large companies , this section ran into hundreds of pages , as salaries kept rising


So the limit got progressively raised to Rs 6000/- pm and later to Rs 12,000/- pm , until one day this requirement got dropped


No doubt , this section was most sought-after by Headhunters / Bridegroom seekers , and avidly researched by all employees across the companies to find out where they stood in comparison with their colleagues  !


Then , in 1978 , came Bhoothlingam Committee report



It recommended ( which got accepted by DCA ) that the compensation differential between the lowest and the highest salary in a company should not exceed 10 times  !


But that committee never laid down any " Upper Limit " for the salaries of the lowest paid workers - which kept rising , month after month , since the DA ( Dearness Allowance ) was linked to Consumer Price Index  , which kept galloping !


On the other hand , Companies were not able to raise the annual salaries of their directors , because of ceiling imposed by DCA  !


As a result , this differential ( of no more than 10 times ) , kept shrinking  !


I remember having projected the annual growth rate of the salary of the lowest paid worker in L&T ( where I worked ) , to estimate that it would overtake the Chairman's salary , within a few years  !


Now contrast this with what Business Line ( 06 July , 2015 ) reported as follows :


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Name of Top Honcho  ........ Ratio { Own Salary / Median Employee Salary }

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*  Y C Deveshwar.................................  439

*  Mukesh Ambani................................  205

*  Aditya Puri.......................................  117

*  Vishal Sikka......................................  116

*  Chanda Kochar...................................   97

*  Azim Premji.......................................   89

*  Sikha Sharma....................................    74

*  Deepak Parekh...................................    19

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I hope this " market determined " and " democratically arrived at " managerial remuneration will continue without outside intervention


What companies want to pay their lowest paid workers and their highest paid top honchos , should be left to their shareholders


But when it comes to the salaries of High Court / Supreme Court Judges or Government Secretaries , is it not a travesty of justice that , after 25 years of service ,  they get paid , less than the starting salary of some 24 + fresh graduate MBAs ?


In a company called , " India Inc. " , we , the citizens are the shareholders


It is high time we start rewarding our " Top Honchos " , commensurate with their responsibilities  !


----------------------------------------------------------------------------------------------------------------

hemen  parekh

08  July  2015












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