Financial Daily from THE HINDU group of publications
Thursday, Sep 19, 2002
Financial Daily from THE HINDU group of publications Thursday, Sep 19, 2002 |
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People Industry & Economy - Events How much must a CEO take home? Our Bureau
Mr M.S. Banga, Chairman, Hindustan Lever Ltd (centre), flanked by Mr N.R. Narayana Murthy, Chairman and Chief Mentor, Infosys Technologies, and Mr Arun Maira, Chairman, Boston Consulting Group, after addressing `The leadership summit' in the Capital on Wednesday.
NEW DELHI, Sept. 18 HOW much salary should the chief executive of a company earn? At the most, 15 times more than what the lowest level employee in the same company gets. That's what Mr N.R. Narayana Murthy, Chairman and Chief Mentor of Infosys Technologies, believes. "That's my personal view. I also feel that corporate leaders should not use resources of the company for their personal use," Mr Murthy said while delivering the keynote address at the `Leadership Summit' organised by the Confederation of Indian Industry (CII) here today. Mr Murthy noted that in the US, CEOs of 23 firms currently under investigation for various auditing frauds earned at least 70 per cent more than their peers in other companies. "But employees of these firms suffered 1,62,000 lay-offs," he pointed out. The general public as well as the Government had lost faith in corporations, what with many accounting and stock market frauds getting exposed these days. "Never before have business leaders lost trust like this... people are asking `how can you be so greedy, so unfair and so poor in governance,'" Mr Murthy lamented. He said the disparity between the `haves' and the `have-nots' had increased in the recent times. "Only middle-class and upper middle-class have benefited from the economic growth... and the stock market boom has helped some stock brokers and corporate leaders line their pockets," he said. Mr Murthy also lamented that the Government could not do much to prevent the stock market scams from taking place. "At the height of the stock market boom, we found that there were 231 companies who used Infosys' name. It is highly regrettable that the Government did not take any step to prevent this and we had to use shareholders' money to fight cases," he said. However, Mr Murthy urged companies to evolve their own code of conduct and simple rules to check unethical practices within the company, rather than wait for the Government to come out with complex regulations.
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