When we read powerful and inspirational stories about how CEOs across the world are signing for $1 or Re1 salary, here's an article on the hike of the CEO at TCS by 50%.
We all understand that the share market needs to be fed with such stories to boost the investors' morale. However, such information sets the standards for the internal and external stakeholders. How do you see this news as an HR?
[TCS to hike CEO's base pay by 50%](http://economictimes.indiatimes.com/tech/ites/tcs-to-hike-ceo-chandrasekarans-2014-base-pay-by-50-to-rs-15-lakhs-a-month/articleshow/20440660.cms)
From India, Mumbai
Acknowledge(0)
Amend(0)
1893We all understand that the share market needs to be fed with such stories to boost the investors' morale. However, such information sets the standards for the internal and external stakeholders. How do you see this news as an HR?
[TCS to hike CEO's base pay by 50%](http://economictimes.indiatimes.com/tech/ites/tcs-to-hike-ceo-chandrasekarans-2014-base-pay-by-50-to-rs-15-lakhs-a-month/articleshow/20440660.cms)
From India, Mumbai
Acknowledge(0)Amend(0)
Hi (Cite Contribution),
I do not believe that investors' morale is boosted by such inappropriate hikes. Investors are only after a return on their investment in the form of either dividends or a rise in the share price, so that they can cash in on the profits. Therefore, there is no such thing as investor loyalty; investors will move to where gains can be made.
In fact, when CEOs are remunerated handsomely, any further hikes are seen as potential loss of dividends, money that would otherwise go into the pockets of investors. As an investor, my morale is boosted when CEO pay is increased by the rate of inflation or thereabouts. The reason most often cited is that the value of the CEO has risen, as in this case TCS revenue went up by 14% against an industry average of 11%, as per the article.
By hiking the salary, the board has reacted out of fear that the CEO will be poached by a competitor. In my opinion, this fear is unjustified as most TCS competitors will have a different infrastructure, culture, strategy, or even the resources to match those of TCS. As TCS is a global organization, the fear of poaching is not restricted within India; this CEO would be in demand worldwide. The CEO of Pepsi comes to mind!
While external stakeholders are not the concern of HR (it is the concern of the organization's publicity and media relations department), internal stakeholders are a different matter. HR will hear of grumblings, particularly when increments are in single percentage figures, if at all. However, it will all die down after a couple of weeks, and it will be back to business as usual... until the next CEO hike!
Regards,
Harsh
From United Kingdom, Barrow
Acknowledge(0)Amend(0)
I do not believe that investors' morale is boosted by such inappropriate hikes. Investors are only after a return on their investment in the form of either dividends or a rise in the share price, so that they can cash in on the profits. Therefore, there is no such thing as investor loyalty; investors will move to where gains can be made.
In fact, when CEOs are remunerated handsomely, any further hikes are seen as potential loss of dividends, money that would otherwise go into the pockets of investors. As an investor, my morale is boosted when CEO pay is increased by the rate of inflation or thereabouts. The reason most often cited is that the value of the CEO has risen, as in this case TCS revenue went up by 14% against an industry average of 11%, as per the article.
By hiking the salary, the board has reacted out of fear that the CEO will be poached by a competitor. In my opinion, this fear is unjustified as most TCS competitors will have a different infrastructure, culture, strategy, or even the resources to match those of TCS. As TCS is a global organization, the fear of poaching is not restricted within India; this CEO would be in demand worldwide. The CEO of Pepsi comes to mind!
While external stakeholders are not the concern of HR (it is the concern of the organization's publicity and media relations department), internal stakeholders are a different matter. HR will hear of grumblings, particularly when increments are in single percentage figures, if at all. However, it will all die down after a couple of weeks, and it will be back to business as usual... until the next CEO hike!
Regards,
Harsh
From United Kingdom, Barrow
Acknowledge(0)Amend(0)
Hello Cite Contribution,
Like Harsh mentioned, stock/trading conditions may not be affected very much by this measure—maybe for a short while at the most.
However, purely from the HR perspective, it would be more interesting and, I guess, appropriate, to check if the same largesse has been doled out to the general-grade employees. After all, TCS is what it is today due to the whole team—from the junior-most employee to the CEO (like it's for any and every organization)—not just due to the CEO or a few of the top honchos.
If the rest of the staff has been given the standard single-digit hikes—being given the usual reasons of the poor IT industry situation, etc.—then that reminds me of the abnormal and indecent hikes the US companies that were the cause for the 2008 bust (which eventually needed Federal Financial Support for survival) gave their CEOs soon after the Federal funds came in, that led to even the newly elected President Obama to react with abhorrence. Except that in the case of TCS, it would be at the expense of the foot soldiers.
If, however, the rest of the staff also did get similar grand hikes (if not around 50%), I think we ought to congratulate and appreciate the TCS Management/Board for laying the foundation for such an equitable distribution of the fruits of collective labor in the Indian IT industry.
Regards,
TS
From India, Hyderabad
Acknowledge(0)Amend(0)
Like Harsh mentioned, stock/trading conditions may not be affected very much by this measure—maybe for a short while at the most.
However, purely from the HR perspective, it would be more interesting and, I guess, appropriate, to check if the same largesse has been doled out to the general-grade employees. After all, TCS is what it is today due to the whole team—from the junior-most employee to the CEO (like it's for any and every organization)—not just due to the CEO or a few of the top honchos.
If the rest of the staff has been given the standard single-digit hikes—being given the usual reasons of the poor IT industry situation, etc.—then that reminds me of the abnormal and indecent hikes the US companies that were the cause for the 2008 bust (which eventually needed Federal Financial Support for survival) gave their CEOs soon after the Federal funds came in, that led to even the newly elected President Obama to react with abhorrence. Except that in the case of TCS, it would be at the expense of the foot soldiers.
If, however, the rest of the staff also did get similar grand hikes (if not around 50%), I think we ought to congratulate and appreciate the TCS Management/Board for laying the foundation for such an equitable distribution of the fruits of collective labor in the Indian IT industry.
Regards,
TS
From India, Hyderabad
Acknowledge(0)Amend(0)
In my personal opinion, such hikes are abnormal and unfair; unless the other equally important stakeholders, namely investors and employees, are also treated alike.
A company is not a one-man show unless it's like the Virgin Group (with a charismatic Richard Branson driving the business) or like flamboyant Dr. Mallya's companies (unfortunately, KFA cannot even pay overdue salaries to its employees); to name a few. Surprisingly, even family-run companies have not showered such largesses on their CEOs.
I think it's bad for business at the end of the day!!
From India, Delhi
Acknowledge(0)Amend(0)
A company is not a one-man show unless it's like the Virgin Group (with a charismatic Richard Branson driving the business) or like flamboyant Dr. Mallya's companies (unfortunately, KFA cannot even pay overdue salaries to its employees); to name a few. Surprisingly, even family-run companies have not showered such largesses on their CEOs.
I think it's bad for business at the end of the day!!
From India, Delhi
Acknowledge(0)Amend(0)
Hello (Cite Contribution),
To add further to this topic/issue, does this indicate a switch in the generally known and understood Tata Mindset? Meaning, is the famous and well-known positive mindset of the Tata Group/Name undergoing a subtle but sure change after the change of guard at the top of the Tata Empire?
I recollect the very positive and rarely exhibited Tata Mindset of 'Taking Care' just because that's the right thing, and not for any name/fame/profit-motive just after the 26/11 Terrorist attacks in Mumbai. I think this was posted in CiteHR too earlier.
Everyone, without exception, who was around the Taj Hotel during the attacks and suffered damage and loss of livelihood—including the roadside Chaiwala guys, Chatwalas, etc—were all supported by the Tata Group in terms of financial and material support to get back on their feet ASAP. All this when the Tata Group didn't really have to do it, since none were even remotely related to the Taj Hotel [by some counts, they were even viewed as 'dirty' neighbors by the affluent]—frankly, had it been any other group, including some very well-known ones, they would have conveniently passed it on to the government or at best, taken good care to publicize that they did this and that.
Vis-a-vis this way of thinking and doing, what happened at TCS does indicate a 180-degree change in orientation/approach. I do hope I am wrong.
Regards,
TS
From India, Hyderabad
Acknowledge(0)Amend(0)
To add further to this topic/issue, does this indicate a switch in the generally known and understood Tata Mindset? Meaning, is the famous and well-known positive mindset of the Tata Group/Name undergoing a subtle but sure change after the change of guard at the top of the Tata Empire?
I recollect the very positive and rarely exhibited Tata Mindset of 'Taking Care' just because that's the right thing, and not for any name/fame/profit-motive just after the 26/11 Terrorist attacks in Mumbai. I think this was posted in CiteHR too earlier.
Everyone, without exception, who was around the Taj Hotel during the attacks and suffered damage and loss of livelihood—including the roadside Chaiwala guys, Chatwalas, etc—were all supported by the Tata Group in terms of financial and material support to get back on their feet ASAP. All this when the Tata Group didn't really have to do it, since none were even remotely related to the Taj Hotel [by some counts, they were even viewed as 'dirty' neighbors by the affluent]—frankly, had it been any other group, including some very well-known ones, they would have conveniently passed it on to the government or at best, taken good care to publicize that they did this and that.
Vis-a-vis this way of thinking and doing, what happened at TCS does indicate a 180-degree change in orientation/approach. I do hope I am wrong.
Regards,
TS
From India, Hyderabad
Acknowledge(0)Amend(0)
I appreciate the above write-up. It is well-written; balanced, analytical, and deals with vital issues facing our country.
About TCS and the Tata philosophy, I would like to believe that the latter always endures as the guiding philosophy of the industrialized economy, and the TCS incident is just an aberration or an exception.
Warm regards.
From India, Delhi
Acknowledge(0)Amend(0)
About TCS and the Tata philosophy, I would like to believe that the latter always endures as the guiding philosophy of the industrialized economy, and the TCS incident is just an aberration or an exception.
Warm regards.
From India, Delhi
Acknowledge(0)Amend(0)
Dear friends,
I appreciate the sentiments expressed by our overseas friend and followed by other experts in one way. However, I should say we should look at the other side of the coin. As you are all aware, project approvals are influenced by political, economic, regional equations, and other matters such as kickbacks, etc. On the other hand, if we look at it impartially, other factors like the environment, local social issues, etc., are involved (as cited in some cases), and we could very well understand the complexity of these cases. We cannot be bogged down only by looking at figures like 4.5%, 6.8%, etc. You know this has been influenced by the lesser growth seen in the organized sector whose bosses are billionaires. Are we worried about why their net worth has fallen by a few million compared to last year or why they have dropped down a few places in Forbes' top 100 wealthiest? These figures are computed, as you know, not only on industrial growth but also on other factors accounting for GDP like growth in agriculture, where other associated issues exist, such as monsoon failures throughout the country last year, etc. Who is bothering about half a billion village laborers who are languishing in remote villages? Do you have the count of farmers who have committed suicide due to crop failures, being unable to repay debts, etc.? Our concern should be addressed to the plight of these millions and it's better not to worry too much about a few lakhs going abroad. You also know special flights are sent to bring back unlicensed workers stranded in overseas countries within a few hours, they are raised in the media, and nothing is done about thousands illegally detained in Sri Lankan and Pakistani prisons. Why this double standard?
Regarding brain drain, everyone is aware that the government and its policies are not aimed at exporting brains. They are going on their own for making faster bucks, braving the risks associated with it. For a population of over 1.25 billion, how much can the organized sector cater to? Why blame only the country?
I'm not saying that everything being said is wrong, but it should be read with ifs and buts. India is India, and things can only be changed by revolutions and not by amendments to acts and laws. We know the history of other countries where revolutions have changed many; one such thing is due in India as we have seen none (independence struggles cannot be counted under this category).
From India, Bangalore
Acknowledge(0)Amend(0)
I appreciate the sentiments expressed by our overseas friend and followed by other experts in one way. However, I should say we should look at the other side of the coin. As you are all aware, project approvals are influenced by political, economic, regional equations, and other matters such as kickbacks, etc. On the other hand, if we look at it impartially, other factors like the environment, local social issues, etc., are involved (as cited in some cases), and we could very well understand the complexity of these cases. We cannot be bogged down only by looking at figures like 4.5%, 6.8%, etc. You know this has been influenced by the lesser growth seen in the organized sector whose bosses are billionaires. Are we worried about why their net worth has fallen by a few million compared to last year or why they have dropped down a few places in Forbes' top 100 wealthiest? These figures are computed, as you know, not only on industrial growth but also on other factors accounting for GDP like growth in agriculture, where other associated issues exist, such as monsoon failures throughout the country last year, etc. Who is bothering about half a billion village laborers who are languishing in remote villages? Do you have the count of farmers who have committed suicide due to crop failures, being unable to repay debts, etc.? Our concern should be addressed to the plight of these millions and it's better not to worry too much about a few lakhs going abroad. You also know special flights are sent to bring back unlicensed workers stranded in overseas countries within a few hours, they are raised in the media, and nothing is done about thousands illegally detained in Sri Lankan and Pakistani prisons. Why this double standard?
Regarding brain drain, everyone is aware that the government and its policies are not aimed at exporting brains. They are going on their own for making faster bucks, braving the risks associated with it. For a population of over 1.25 billion, how much can the organized sector cater to? Why blame only the country?
I'm not saying that everything being said is wrong, but it should be read with ifs and buts. India is India, and things can only be changed by revolutions and not by amendments to acts and laws. We know the history of other countries where revolutions have changed many; one such thing is due in India as we have seen none (independence struggles cannot be counted under this category).
From India, Bangalore
Acknowledge(0)Amend(0)
Further to the comments of Anon and Kumar,
India is on a downward spiral, not because of the corporations, industries, farmers, or the monsoon, etc., but because Indian politicians have no vision, unlike Indonesia, Vietnam, Singapore, China, and now even Burma. Indian politicians can only pay lip service and dole out laptops, blankets, and saris to maintain their vote banks made up of the poor millions.
I am often told that the government's work is hampered because it is a coalition. What nonsense! There are coalitions all over the world, including the UK, where the good of the country and its people come first, and pockets are lined afterwards.
When a country takes years, if not decades, to deliver justice to the people; when promises of compensations never materialize; when positions of power are given to family members; when industry and entrepreneurs are ignored; when foreign troops incur (and some six weeks later are still there); when scams are a weekly occurrence... then the netas have failed.
Government of the people, by the people, for the people? Not in Incredible India.
So, I, for one, do blame the country or rather its incredible politicians.
My rant is not to bash India, and what I have said does hurt the heart.
Jai Hind!
Harsh
From United Kingdom, Barrow
Acknowledge(0)Amend(0)
India is on a downward spiral, not because of the corporations, industries, farmers, or the monsoon, etc., but because Indian politicians have no vision, unlike Indonesia, Vietnam, Singapore, China, and now even Burma. Indian politicians can only pay lip service and dole out laptops, blankets, and saris to maintain their vote banks made up of the poor millions.
I am often told that the government's work is hampered because it is a coalition. What nonsense! There are coalitions all over the world, including the UK, where the good of the country and its people come first, and pockets are lined afterwards.
When a country takes years, if not decades, to deliver justice to the people; when promises of compensations never materialize; when positions of power are given to family members; when industry and entrepreneurs are ignored; when foreign troops incur (and some six weeks later are still there); when scams are a weekly occurrence... then the netas have failed.
Government of the people, by the people, for the people? Not in Incredible India.
So, I, for one, do blame the country or rather its incredible politicians.
My rant is not to bash India, and what I have said does hurt the heart.
Jai Hind!
Harsh
From United Kingdom, Barrow
Acknowledge(0)Amend(0)
Hello,
I really liked the way you guys have put up your views. When it comes to the growth and development of our country, everything comes to politics. It’s very easy to blame politics or ministers for that matter but one of the most important things which most of the times gets missed is the diversity in our country.
If you study the culture of Japan you would understand that it is not just a country it’s a family, there is only one religion and that is something which hold them so strong in the world. It does not have natural resources nor it has huge population what it but it has is unity, likeness. This is very very important for any country to grow.
I love my country and I am proud of it, but then there is other side of India also, in which there are many religions and many cultures which do along with each other, why you think these political leaders win their sits. It’s more because of favoritism to a particular religion rather than development or anything else.
I know this could not be rectified in a day but then at least we can stop this practice of favoritism at our end because unless and until we practice this, it would be difficult to convince other.
Regards,
Avinash.
Acknowledge(0)Amend(0)
I really liked the way you guys have put up your views. When it comes to the growth and development of our country, everything comes to politics. It’s very easy to blame politics or ministers for that matter but one of the most important things which most of the times gets missed is the diversity in our country.
If you study the culture of Japan you would understand that it is not just a country it’s a family, there is only one religion and that is something which hold them so strong in the world. It does not have natural resources nor it has huge population what it but it has is unity, likeness. This is very very important for any country to grow.
I love my country and I am proud of it, but then there is other side of India also, in which there are many religions and many cultures which do along with each other, why you think these political leaders win their sits. It’s more because of favoritism to a particular religion rather than development or anything else.
I know this could not be rectified in a day but then at least we can stop this practice of favoritism at our end because unless and until we practice this, it would be difficult to convince other.
Regards,
Avinash.
Acknowledge(0)Amend(0)Engage with peers to discuss and resolve work and business challenges collaboratively - share and document your knowledge. Our AI-powered platform, features real-time fact-checking, peer reviews, and an extensive historical knowledge base. - Join & Be Part Of Our Community.
Salary-Note.doc
SALARY SHEET CALCULATION.xls