ANALYSIS Private bank CEOs see muted salary hikes in FY25, Kotak Bank CEO drew highest pay

Banks

Salaries of private sector bank heads witnessed a 4-12 percent year-on-year increase in the financial year 2024-25, with Kotak Mahindra Bank’s CEO, Ashok Vaswani, drawing the highest compensation of Rs 12.95 crore in FY25. Vaswani, who officially took charge on January 1, 2024, drew a total salary of Rs 1.62 crore for the three-month period in FY24. Uday Kotak, the promoter and former MD & CEO of the bank, took home  a Re 1 token salary in FY23.

According to Moneycontrol’s analysis of private banks' annual reports, HDFC Bank's CEO, Sashidhar Jagdishan saw the highest increase in salary of 11.96 percent year-on-year.  According to the numbers available, Jagdishan took home a pay of Rs 12.08 crore in FY25. This is excluding ESOPs of 2,12,052 shares granted to him in the previous fiscal.

Axis Bank's CEO, Amitabh Chaudhry earned Rs 9.11 crore in FY25, a jump of 0.2 percent from FY24's salary. Based on data available so far, he is followed by IDFC First Bank's CEO V. Vaidyanathan who took a salary of Rs 5.55 crore in FY25, up 4.53 percent from FY24's Rs 5.30 crore.

Vaswani was granted 18,580 shares through the bank's employee stock options programme in FY25, lower than 51,813 granted in FY24. Amitabh Chaudhry was granted 2,59,429 stock options in FY25, which was lower compared to 3,13,300 in FY24. Vaidyanathan was granted 24,20,626 stock options in FY25, as against 30,59,514 in FY24.

It is pertinent to note that FY25 salaries may not be inclusive of variable pay which CEOs are entitled to for that year. There is usually an element of lag in the variable pay, as it goes through a process of approval from the banking regulator.

For instance, Jagdishan was paid 50 percent of the cash variable pay for the Performance Year 2023-24 (total cash variable pay approved by RBI was Rs 5.25 crore), or Rs 2.63 crore in January FY25, as per the bank's annual report.

While Jagdishan saw the highest jump in FY25 pay package, excluding ESOPs, the overall increment in bank chiefs' salaries seem a tad muted compared to the payouts in FY24 and FY23.

The average salary increase in FY25 was around 6 percent, compared to 8 percent in FY24.

ICICI Bank and Yes Bank are yet to release the annual reports for FY25.

Comparison with PSU banks

The long standing disparity between private and PSU bank chiefs continued to be the case even in FY25. For instance, Jagdishan's salary was still twice that of the combined salaries of the top 10 state-owned bank’s chiefs.

The combined take home salaries of top 10 state-owned bank chiefs stood at Rs 5.13 crore in FY25, up from Rs 4.46 crore in FY24. This includes Bank of Baroda, State Bank of India, Indian Overseas Bank, Bank of India, UCO Bank, Canara Bank, Union Bank of India, Central Bank of India, Punjab National Bank, and Bank of Maharashtra.

According to a Moneycontrol analysis of annual reports, managing directors and chief executive officers of public sector banks took home salaries in the range of Rs 42 lakh to Rs 81 lakh in FY25.

Interestingly, Debadatta Chand, MD and CEO of Bank of Baroda, took home the highest pay of Rs 74 lakh in FY25, up from Rs 58.70 lakh in FY24. This was followed by Indian Overseas Bank MD and CEO Ajay Kumar Srivastava's Rs 64.40 lakh, up from Rs 40.80 lakh in FY24, and State Bank of India Chairman Challa Sreenivasulu Setty's Rs 63.87 lakh, up from Rs 39.31 lakh in FY24.

Chiefs of smaller banks such as Bank of Maharashtra and Canara Bank took home a much lower sum; Rs 37.81 lakh and Rs 42.41 lakh respectively, in FY25.