SBI, BoB, Canara Bank top execs’ salary hikes halved in FY23

The remuneration of the MD & CEO of BoB and Canara Bank rose 6.37 percent and 7.77 percent, respectively. This too is nearly half of what they got in the previous fiscal, which was 14.32 percent and 13.02 percent, respectively.

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The annual remuneration of the top executives of the State Bank of India (SBI), Bank of Baroda (BoB), and Canara Bank rose 6-7 percent in the fiscal year 2022-23, according to data in the annual reports of these lenders.

The rate of salary growth was almost half that of the previous financial year.

The total remuneration of SBI Chairman Dinesh Khara rose 7.45 percent in FY22-23, to Rs 36.99 lakh. In the previous fiscal, Khara's remuneration had increased by 13.45 percent.

The report of Khara’s salary triggered a storm on social media. While some argued that his compensation was too low considering the size of the bank he heads, others said the SBI Chairman’s job comes with other perks.

Also read: SBI Chairman Dinesh Khara took home Rs 37 lakh annual salary in FY23

The remuneration of the MD & CEO of BoB and Canara Bank rose 6.37 percent and 7.77 percent, respectively. This too is nearly half of what they got in the previous fiscal, which was 14.32 percent and 13.02 percent, respectively.

In their annual reports, SBI and BoB said that the estimates of future salary growth factored in actuarial valuation, inflation, seniority, promotion, and other relevant factors such as demand and supply in the employment market. Such estimates are long-term in nature.

“Empirical evidence suggests that in the long-term consistent high salary raises are not possible,” the reports added.

The figures

As per the bank’s annual report, the SBI chairman’s remuneration of Rs 36.99 lakh includes a basic salary of Rs 27 lakh and Rs 9.99 lakh as dearness allowance.

The MD & CEO of BoB and Canara Bank received Rs 43.04 lakh and Rs 39.76 lakh, respectively, in FY23.

However, the remuneration of the MD & CEO of the public sector lender Bank of India (BoI) was 11.42 percent lower in FY22-23 compared to the previous financial year. It was Rs 28.89 lakh In FY22-23 as against Rs 32.62 lakh in FY21-22, and Rs 30.03 lakh in FY20-21, the annual report showed.

SBI, BoB, and Canara Bank all had all reported strong growth in profits in FY22-23, with improvement in asset quality.

During FY22-23, the standalone net profit of SBI, the country’s largest state-owned bank, rose by over 58 percent to Rs 50,232 crore from the previous year’s net profit of  Rs 31,676 crore.

Also read: Yawning gap: SBI chairman’s Rs 37 lakh salary reignites public vs private banks debate

Canara Bank recorded a robust 86.76 percent on-year growth in net profit to Rs 10,604 crore in FY22-23, while BoB’s net profit rose 94 percent in FY22-23 to Rs 14,110 crore compared to Rs 7,272 crore in FY21-22.

According to the CH Venkatachalam, General Secretary, All India Bank Employees Association, emoluments of bank executives like managing directors and executive directors are fixed as per government guidelines, but the incentives they get changes depending on performance.

Every bank has a remuneration committee which decides the incentives for top executives depending on the performance of the bank.

“In state-owned banks there is job security, pension, and other benefits, whereas in private banks there are no such benefits,” Venkatachalam added.