In a first at Mahindra, MD's pay package surpasses that of Chairman's

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26 Aug, 2025 12:21

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The remuneration paid to Mahindra & Mahindra (M&M) Managing Director Pawan Goenka overtook that of Chairman Anand Mahindra last year as the company reported a double digit growth in net profit.

Goenka's remuneration (salary and commission) during 2017-18 increased to Rs 8.70 crore, a rise of 17.73 percent, while that of Mahindra increased by 4.69 percent to Rs 8.03 crore, according to details provided by M&M.

The remuneration paid to Goenka does not include the perquisite value of ESOPs exercised by him, which stood at an additional Rs 3.51 crore.

This is the first time that the pay package of the company's MD has gone past that of the chairman after the change of guard that took place following the retirement of former chairman Keshub Mahindra.

Remuneration data for the period before Keshub Mahindra handed over the reins of the company to his nephew is not available. From the time he took over till the end of FY16, Anand Mahindra was both chairman and MD.

In 2016-17, Goenka, who was appointed as an executive director on M&M's board in 2013-14, was promoted to the post of managing director. Mahindra, meanwhile, continued to hold the post of executive chairman.

But a managing director getting paid more than a company's chairman is not an unusual occurrence in the automotive industry.

Bajaj Auto Managing Director Rajiv Bajaj draws a remuneration that is higher than that of his father Rahul Bajaj, who is still the chairman of the company.

Similarly, Tata Motors MD and CEO Guenter Butschek gets paid more than than the company's Chairman N Chandrasekaran. The same is the case with Eicher Motors MD and CEO Siddhartha Lal.

Despite a significant rise in competition in the utility vehicle (UV) segment in which M&M operates, the company was able to report a double-digit rise in net profit in FY18.

While the automobile manufacturer has been losing market share in the UV segment because of the emergence of Maruti Suzuki and Hyundai, the performance of its tractor business exceeded expectations last year.

With a 43 percent market share in the tractor segment, the company clocked sales of 3.04 lakh units in the domestic market, 22 percent higher than the number it sold in 2016-17.

In FY18, for every Rs 100 of profit before tax that M&M made, nearly Rs 50 came from the farm equipment segment (FES), including from the sale of tractors.

To be precise, the segment generated a profit of Rs 3,145 crore, 23 percent higher than in the previous year. This was higher than the profit of M&M's automotive segment, which came in at Rs 2,872 crore.