Axis Bank managing director and chief executive officer (MD & CEO) Amitabh Chaudhry was the highest-paid private bank chief in India in the previous financial year, drawing a total of Rs 7.62 crore in annual salary, as per the bank’s FY22 annual report.
Chaudhry was also separately granted a total of 412,938 stock options of Axis Bank during FY22, on the basis of approval received from the Reserve Bank of India (RBI), the Axis Bank annual report said. The stock options were granted at Rs 726.25 per share.
“The vesting schedule for the said stock options is 30 percent options after expiry of one year, 30 percent options after expiry of two years and balance 40 percent options after expiry of three years from the date of grant. The vested options are exercisable within a maximum period of five years from the date of respective vesting,” the bank said.
Chaudhry was followed by IndusInd Bank chief Sumant Kathpalia, who made over Rs 7.31 crore in annual salary in FY22. Kathpalia was followed by ICICI Bank MD Sandeep Bakhshi, who earned Rs 7.05 crore in annual salary last fiscal, as per the bank’s annual report.
HDFC Bank MD & CEO Sashidhar Jagdishan pulled in Rs 6.51 crore during the previous fiscal, while Bandhan Bank MD C.S. Ghosh drew Rs 4.35 in annual salary in FY22. HDFC Bank executive director Kaizad Bharucha, meanwhile, earned more than the lender’s MD during the previous fiscal, drawing a total of Rs 10.64 crore, including performance bonuses.
The annual salary of private bank leaders in India is significantly higher than their public sector bank peers.
For instance, Bank of Baroda MD Sanjiv Chadha earned Rs 38.19 lakh as annual salary and Rs 2,27,191 in perquisites in FY22, while State Bank of India chairman Dinesh Khara earned Rs 27 lakh in basic pay and Rs 7,42,500 as dearness allowance.
On a consolidated basis, the salary of the top five public sector bank leaders in FY22, excluding Punjab National Bank, ranged between Rs 34 lakh and Rs 40 lakh.
The salary of private bank heads is also significantly higher than that of RBI top brass.
RBI governor Shaktikanta Das’ monthly remuneration stood at Rs 2.5 lakh during the previous financial year, the same as what former governor Urjit Patel earned per month during his tenure, the central bank said in a response to a right to information (RTI) query filed by Moneycontrol.
As per the reply, the four deputy governors at the RBI, MD Patra, M Rajeshwar Rao, MK Jain and T Rabi Sankar, drew Rs 2.25 lakh per month each, as of March end.
RBI executive directors including Anil Kumar Sharma, Shirish Chandra Murmu, Om Prakash Mall and Mridul Kumar Saggar, among others, earned Rs 2.16 lakh in monthly basic salary each, as of FY22 end, the RTI response showed.
When asked why the annual salary of PSU bank heads is so low in comparison with private banks, the RBI said: “What is being sought is an opinion and not ‘information’ as defined under section 2(f) of the RTI Act, 2005.”
Further, the RBI also does not have information on what are the annual targets for PSU bank heads and what their performance is judged on, as per the RTI response.
The pay gap between private and public sector bank heads has been a long-standing issue that needs a solution in order to attract top talent, bankers said. The salary of a private bank leadership team member is competitive due to better employee stock ownership plans (ESOPs).
“The respective banks’ boards must be authorised to decide compensation based on composite performance parameters of the individual and the bank,” a senior banker with a private sector bank said. “The talent crunch can be solved if the board is also permitted to recruit whole-time directors from the market. Today these are selected only from public sector banks,” the banker added.
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