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HEG CEO Ravi Jhunjhunwala on top of FY19 remuneration rankings, corporate watchdogs raise alarm

HEG, which manufactures graphite electrodes used in the steel industry, posted record-high profits for the last fiscal after graphite prices surged.

July 26, 2019 / 01:31 PM IST
 
 
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The almost three-fold jump in the pay package of HEG CEO Ravi Jhunjhunwala, who took home Rs 121.27 crore in FY19 even as the company’s shares nosedived, has caused concern among corporate governance watchdogs, The Economic Times has reported.

The compensation consists commissions of Rs 118.81 crore calculated at 2.5 percent of HEG’s net profit. His compensation against median salaries across the company was 4045:1, the report said.

Moneycontrol could not independently verify the report.

HEG, which manufactures graphite electrodes used in the steel industry, posted record-high profits for the last fiscal after graphite prices surged.

However, share value has plunged by 81 percent from the Rs 4,950 all-time high in October 2018. Removal of anti-dumping duty, high Chinese imports and stop on export to Iran has had an impact, the report added.

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The Companies Act, 2013, stipulates that a manager can receive 5 percent of net profit. If the company has more than one manager, then they can receive 10 percent of net profit.

"Promoters or shareholders' salary should be moderate and they should distribute the profits to all shareholders equally through dividends," Shriram Subramanian, CEO of InGovern Research Services, told the paper.

Stressing that wealth was tied to the shareholding of the company, Amit Tandon, managing director of Institutional Investor Advisory Services, said, “Promoters taking a huge salary will shake investor confidence in the stock and he will lose far more than he is hoping to gain through this payout.”

As it stands now, Jhunjhunwala may be the top earner last fiscal. But the position may change as companies such as Sun TV and Tech Mahindra have yet to publish their annual reports. Hero Motocorp CMD Pawan Munjal came in second with Rs 81.41 crore followed by Deepak Nitrite executive director Umesh Asaikar who took home Rs 59 crore.
Moneycontrol News
first published: Jul 26, 2019 01:15 pm

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