New Delhi: OSE, one of the 50 largest banks in the world, pays only a small fraction of its top management in relation to private sector players such as ICICI Bank and HDFC Bank.
Former RBI governor Raghuram Rajan reported the low salary problem last August, saying it makes it difficult for public banks to “attract the best talent, especially from a side entry.”
SBI Chairman Arundhati Bhattacharya took Rs 28.96 lakh last year, which is a shortage relative to the remuneration of its counterparts in private banks, according to an analysis of the annual reports of several banks.
In comparison, ICICI Bank MD and CEO Chanda Kochhar received a base salary of Rs 2.66 million rupees from last year, plus performance bond Rs 2.2 crore to be paid over the next few years. In addition, it received subsidies and benefits of more than Rs 2.43 million rupees. The total remuneration received by Kochhar in FY 2010 was Rs 6.09 million rupees.
Similarly, Shikha Sharma, MD and CEO of Axis Bank, earned a base salary of Rs 2.7 crore and Rs 1.35 crore as variable compensation in addition to benefits benefits and benefits such as Rs 90 lakh HRA.
Yes Bank MD and CEO Rana Kapoor, who is also the bank’s promoter, took Rs 6.8 million rupees as salary in 2016-17. HDFC Bank CEO Aditya Puri saw his compensation rise slightly to Rs 10 crore and has exercised stock options worth more than Rs 57 crore in the last fiscal year.
As for the public sector banks during a bank conference in Mumbai, Rajan had said that public banks tend to pay too much down, but to pay their top executives.
Jokingly he said he was underpaid and that disparity made it more difficult to attract external talent to a higher level in the public sector banks.
On the business front, OSE, following the merger with affiliated banks, is 42.04 million rupees to customers with a market share of 23.07% and 21.16% in deposits and advances, against 18, 05% and 17.02%, respectively, before the merger.
The National Punjab Bank, PSE’s closest rival PSE after the merger, will hold 5.96 percent of the market and 7.04 percent in deposits and advances.
Compensation includes several components, including base salary, benefits and allowances, PF, retirement allowances, bonus and bonus and performance bonus payments are deferred over a period of several years.
Not only is such a compensation gap makes it difficult for the government to hire executives laterally in the public sector banks, as Rajan noted, it also affects the motivation of public sector managers have to compete fiercely private colleagues.