... or so our politicians would have us believe. Having imposed cattle class on their ilk, the high-priests of austerity have turned to a new, softer target: executive salaries. Never mind, that in our so-called "liberal" economy, the Government has no locus standi on determining or even influencing salaries in private sector enterprise. It is the owners of the enterprise, the shareholders who must decide what they want to pay their managers. If they believe that a CEO is worth paying Rs 50 crores, so be it, even though it might be 12,500 times the per capita GDP of India (as TOI informed us recently). Remember, there are many CEOs, including those of blue-chip companies, whose CEOs get paid far less. Far, far less, in fact. That is the question investors (and perhaps the Government as the regulator) must try and solve. Why can some companies attract CEOs - highly experienced professionals - for a compensation of about Rs 1-5 crores whereas other companies end up paying 10-50 times as much? It is very obvious that owner-CEOs have a significantly higher level of compensation than professional-CEOs. In a large Indian telecom company, the owner Executive Chairman received almost 8 times as much compensation as the professional MD. Are the public and institutional shareholders exercising any control or influence over executive compensation, particularly when the "executive" is a significant shareholder himself/herself? The blame, if any, must then lie with the "independent" Directors who are letting the promoters decide how much to pay themselves. (Btw, politicians have the same problem: MPs vote for their own salary hikes in Parliament.) So, Mr. Minister, the answer does not lie in "regulating" executive compensation and/or asking for "restraint". The Government needs to ensure, through regulation and education, that our publicly listed companies behave like public companies, with active public shareholders (represented by strong, knowledgeable and truly independent Directors). We have too many private fiefdoms masquerading as public companies in India.
I spent a couple of hours this morning at a Registrar's office in Navi Mumbai getting a document registered. During those two hours, there was no electricity in the area: part of the scheduled 3-4 hour load-shedding that is prevalent across all of urban Maharashtra excl. Mumbai (rural areas have longer power-cuts). Many homes and most businesses "beat" the power-cut by using inverters (a crude way of load-balancing, perhaps!), so they don't really bear the brunt of the heat and humidity.
What shocked me today was the observation that Government offices don't seem to have that benefit. Indeed, there was an inverter in the Registrar's office but only to run the PC and printer that was required for the registration activity. Not a single fan was working on this extremely hot and uncomfortable morning. Yet, the officials were all working, without too much of a complaint about the situation - for it must be a regular thing for them. The small office was crowded with people awaiting their turn, multiple parties signing documents and getting them stamped and so on. The sub-registrar, the boss of the place, sat in the centre of all this activity, with a soft smile on his face as he scrutinized agreements worth millions of rupees or marriages (worth much more!), and signed wherever he needed to. Not once during the two hours did I see him lose his temper or get irritated at anyone/anything. There was no way I could have kept my peace or lasted even a day in such an environment.
However, our public servants work in such an environment. Daily.
There is a lot that is wrong with the Government and the bureaucracy. Productivity is low, and there's corruption everywhere. But, the next time we sit in our air-conditioned offices (or lounges) and pass remarks about how all these babus are lazy and corrupt, spare a thought for those officers sweating it out in dingy, claustrophobic offices, without some of the basic amenities that we take for granted.
A lot needs to change...