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