It pays to be the head of a fast-moving consumer goods (FMCG) company. Saugata Gupta, managing director and CEO, Marico, saw a significant jump of 157 percent in his total pay package in financial year 2022 (FY22) to emerge as the highest-paid CEO in the segment. Gupta’s pay package, Rs 14.02 crore in FY21, rose to Rs 36.1 crore in FY22. However, a substantial part of this came via perquisites— employee stock ownership plan and restricted stock units, where the company gives its shares to the employee—during the year as Gupta exercised stock options granted to him. He drew Rs 22.47 crore under the perquisites-ESOPs/RSUs bucket compared to Rs 3.36 crore drawn last year.
The salary of Sanjiv Mehta, CEO and MD, Hindustan Unilever Ltd (HUL), also saw a substantial jump of 47 percent to Rs 22 crore in FY22 versus Rs 15 crore in FY21. Mehta drew Rs 3.7 crore as salary, Rs 9.2 crore as allowances, Rs 4.3 crore as bonus and Rs 4.2 crore as perks, including long-term incentives. Contribution to provident fund (PF) and perquisites formed other components of his salary.
Mehta, the highest-paid FMCG CEO in FY20 with a salary of Rs 19.42 crore, saw his remuneration drop 21 percent in FY21, and Nestle India’s chairman and managing director Suresh Narayanan dethroned him, boasting of a pay package of Rs 17.19 crore (in 2020—Nestle follows the January-December financial year).
This year, however, Narayanan came in as the third highest paid top executive in the segment, despite his pay package for 2022 posting a 9.3 percent jump over CY21 at Rs 18.8 crore. Narayanan’s pay package included salary and allowances, perquisites, the company’s contribution to PF, and commission and performance-linked incentives. The CMD was paid Rs 9.24 crore under the salary and allowances component, Rs 5.9 crore as perks and Rs 3.37 lakh towards PF contribution. He drew Rs 3.32 crore as commission and performance-linked incentives in 2021.
Navigating rough waters
The FMCG industry had a tough time in the past year as unprecedented inflation across commodities and raw materials jacked up costs substantially even as a demand slowdown made it challenging to pass on the increase to consumers. The performance of most companies, as a result, suffered in FY22 and growth has mostly been price-driven while sales volumes have either fallen or remained flat.
Salaries of FMCG executives, however, have seen a jump in spite of subdued performances by the companies, with some justification.
“When we look at the last two and a half years, CEO compensation has not been just about the company’s performance and the sales generated. Boards are also evaluating their top executives on the ability to sustain and steer the company in these challenging times,” said James Agarwal, MD of head-hunting firm BTI Executive Search, an arm of PersolKelly, a US-Japan human resources company.
The salaries of most FMCG CEOs reflect this trend.
Dabur CEO Mohit Malhotra, for instance, saw a 42.85 percent jump in remuneration for FY22 to Rs 14.60 crore. Similarly, Britannia’s Varun Berry’s pay package jumped by 9.03 percent to Rs 11.47 crore compared to Rs 10.52 crore year. This excludes Rs 33.13 crore on the exercise of phantom options under Britannia Industries Limited Phantom Option Scheme. (A phantom stock is where an employee has all the benefits of owning a stock without actually having ownership of the stock and is paid in cash when a milestone is reached.)
Sanjiv Puri, chairman and managing director of ITC, witnessed a 5 percent jump in his total salary for FY22 to Rs 12.59 crore from Rs 11.95 crore last year.
Tata Consumer Products (TCPL) CEO and MD Sunil D’Souza was the only top FMCG executive whose pay package was slashed in FY22. D’Souza was paid Rs 7.62 crore in FY22, a cut of 27.34 percent, versus Rs 10.49 crore in FY21.
Sudhir Sitapati, who took over as MD and CEO of Godrej Consumer Products Ltd (GCPL) in October, was paid Rs 2.66 crore as total compensation in FY22. Nisaba Godrej, the daughter of Godrej Group chairman Adi Godrej, was appointed the MD and CEO of GCPL in FY21 after Vivek Gambhir stepped down as MD and CEO. Godrej waived her remuneration for 2020-21 due to the impact of the COVID-19 pandemic on the company.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
