Highest-paid FMCG CEO: Check who takes home Rs 17.19 crore

The FMCG industry has performed well in the last two years. [Representative image]

Suresh Narayanan, Chairman and Managing Director (CMD), Nestle India, has dethroned HUL CMD Sanjiv Mehta to become the highest-paid CEO in the FMCG industry in India. Narayanan, according to Nestle’s annual report for CY2020, took home an overall salary of Rs 17.19 crore, a jump of 6.3 percent as compared to Rs 16.17 crore he had drawn in CY19. Nestle follows a January to December accounting year.

Meanwhile the pay package of Mehta, which stood at Rs 19.42 crore in fiscal 2020, dropped by 21 percent in FY21 to Rs 15.4 crore. Mehta with this pay cut is now the second-most paid FMCG executive in the country, followed by Marico’s Saugata Gupta at Rs 14.02 crore.

Narayanan's salary was 137 times higher than the median salary of Nestle India employees, Mehta’s was 122 times higher than the median salary of HUL employees, while Gupta’s was over 123 times higher, according to the annual reports of these companies.

In FY19, Vivek Gambhir, MD and CEO of Godrej Consumer Products was the highest-paid FMCG executive at Rs 20.09 crore. After Gambhir stepped down from the company in June 2020, Nisaba Godrej, the daughter of Godrej Group chairman Adi Godrej, was appointed the MD and CEO. Godrej waived off her remuneration for the year 2020-21 due to the impact of the COVID-19 pandemic on the company. GCPL appointed Sudhir Sitapati as its MD and CEO in May.

Tata Consumer Products, another FMCG major, paid Rs 10.49 crore in remuneration to its MD and CEO Sunil D’Souza, as compared to Rs 4.3 crore his predecessor Ajoy Misra received in FY20.

The remuneration package includes salary, allowances and perquisites, contribution to retiral funds, long-term incentives, and stock options.

Mehta also was the only CEO in the segment to witness a drop in his salary during the year. Most other companies gave pay hikes to their top executives. Dabur CEO Mohit Malhotra drew the highest pay hike of 54.61 percent to Rs 10.22 crore.

His remuneration in FY20 stood at Rs 6.61 crore. ITC’s Sanjiv Puri, too, witnessed a significant hike of 47 percent in FY21. His overall salary for the period stood at Rs 11.95 crore as compared to Rs 7.83 crore drawn a year back.

ITC changed the remuneration structure of its key managerial structure in 2019 after its largest shareholder British American Tobacco turned down the proposal to issue stock options to top executives. Puri’s salary for FY20 only accounted for a few months of this change as it was approved by the board in September 2019. The effect of restructuring is reflected in his FY21 salary. Puri’s total pay was 222 times higher than the median salary of ITC employees.

The pay package of Varun Berry, MD and CEO, Britannia, jumped 7.46 percent to Rs 10.52 crore as compared to Rs 9.78 crore in FY20. Saugata Gupta’s remuneration jumped by 2 percent, while Emami MD Sushil K. Goenka’s salary remained unchanged at Rs 1.4 crore. However, given that he is a promoter of the company, Goenka's payout also includes dividends and could be much higher than the figure shared in the annual report.

The handsome payouts by the FMCG companies to their top executives come in a period that has been marred by supply chain challenges and other logistics issues. Much like several other industries, The FMCG companies had a difficult time ensuring sales of their products after the government announced a nationwide lockdown as the first wave of the COVID-19 pandemic struck the country.

The companies, however, were quick to adopt technology and other innovative measures to resolve these issues and eventually reported recovery towards the end of the year.

“The FMCG industry has performed well in the last two years. Most of the products in the segment are essential in nature and despite the supply disruption during the first wave, the top honchos were able to steer their companies towards recovery,” said James Agarwal, MD of BTI Executive Search.

“Hence, they have been rewarded for handling the crisis,” said Agarwal.

The FMCG industry also was comparatively less impacted by the pandemic as compared to sectors such as hospitality, travel and tourism or media and entertainment.

Nestle India’s revenue from operations for the full year 2020 grew 7.93 percent to Rs 13,350 crore, while its net profit for the period jumped 5.79 percent over the previous year to Rs 2082.43 crore. HUL reported an 18 percent growth in annual turnover to Rs 45,311 crore in FY21, while net profit in this period also rose 18 percent. The gross revenue and profit after tax from ITC’s FMCG business for FY21 stood at over Rs 48,000 crore and Rs. 13,000 crore, respectively.