HDFC Bank Managing Director Aditya Puri took home a total remuneration of Rs 18.9 crore in the fiscal year 2019-20, according to the latest annual report released by the bank. This figure is around 38 percent higher than what the bank offered Puri in the previous financial year, which is Rs 13.7 crore.
Puri’s remuneration of Rs 18.9 crore is excluding the value of the stock options exercised during the year which is about Rs 161 crore. This is including the stock options granted and vested over several previous years, but exercised during FY19, the report showed. The remuneration includes value of perquisites worth Rs 2.1 crore.
Kaizad Bharucha, the executive director of HDFC Bank, earned a total of Rs 8.6 crore in FY20 compared with Rs 5.8 crore in FY19, or an increase of 48 percent. Bharucha’s compensation includes Rs 80 lakh of worth of perquisites while it excludes Rs 31.6 crore worth stock options exercised in FY19. In other words, HDFC Bank paid a total of Rs 27.5 crore to two of its top executives in FY19.
Independent directors remuneration
Among HDFC Bank’s independent directors, former RBI deputy governor Shyamala Gopinath earned Rs 64 lakh in FY20, which includes Rs 29 lakh of sitting fees. Gopinath earned the highest remuneration among all independent directors. Malay Patel drew the second highest among independent directors at Rs 43.5 lakh, followed by Umesh Chandra Sarangi (Rs 31 lakh), Sanjiv Sachar (Rs 33 lakh), Sandeep Parekh (Rs 31 lakh) and M D Ranganath (Rs 36.5 lakh).
How much SBI executives earned?
Rajnish Kumar, the chairman of India’s largest bank, State Bank of India (SBI) earned Rs 31.2 lakh in 2019-20, which includes a basic salary of Rs 27 lakh and DA of Rs 4.2 lakh, according to the bank’s latest annual report. Among the managing directors (MDs) of SBI, Parveen Kumar Gupta drew Rs 41.3 lakh in FY20 (of which Rs 11 lakh was leave encashment paid) and Dinesh Kumar Khara earned Rs 29.4 lakh. Arijit Basu, another MD, drew Rs 28.5 lakh.
The wage disparity between the public and the private sectors, however, is not limited to banks. The government has not acted to reform the pay structure so far except for a few tweaks. There is another view that pay reform alone doesn’t make sense unless a level playing field is granted to all banks.
"There is no point in comparing the salaries of private and public sector bankers for obvious reasons. This difference is visible across industries, not just banking," said a former PSB chairman on condition of anonymity.
In August 2016, former RBI governor Raghuram Rajan called attention to the issue when he said salaries of top level employees of the public sector, including RBI, are way short of global standards.
"One of the problems, of course, is that the public sector overpays at the bottom but underpays at the top. I also feel underpaid," Rajan said.
The debate on the relatively lower pay scales of PSB officials was revived recently when the SBI chairman jokingly made a comment on the issue. In a recent conference call with analysts, Kumar was asked if his bank would undertake a pay cut for employees. Pat came Kumar’s reply: "Road pe aake rehna padega, pehle hi itni kam milti hai (I'll have to live on road, I already get so less).”