Pankaj Patel, chairman and managing director of over Rs13,000 crore Zydus Cadila group, emerged as the highest-paid executive in Gujarat Inc during the year, registering a rise of 87.6% in his salary over the last year.
Financial year 2009-10 proved to be another rewarding year for most of the head honchos of Gujarat Inc, but some of them saw a fall in their annual salaries. Pankaj Patel, chairman and managing director of over Rs13,000 cr Zydus Cadila group, emerged as the highest-paid executive in Gujarat Inc during the year, registering a rise of 87.6% in his salary over the last year.
With an increase of Rs13.36 crore in his emoluments over last year’s Rs 15.26 cr, Pankaj Patel who now earns Rs 28.60 cr, moved to number one position from fourth position in 2008-09. He left Vivek Jain of Gujarat Flurochemicals Ltd, who was at the top slot in 2008-09, behind. He also moved ahead of Gautam Adani of the over Rs1 lakh crore Adani Group and Markand Bhatt of Torrent Power, who ranked second and third in the financial year 2008-09.
The increase outpaced the growth in the net profit and sales of Zydus Cadila, which went up 67% and 25% respectively. However, Patel didn’t draw any salary from his second listed company, Zydus Wellness, of which he is the chairman.
Markand Bhatt, executive director of Torrent Power, ranked second in the list. His emoluments increased 39% to Rs21.50 crore, with commission alone accounting for Rs17.60 crore. He had received Rs15.47 crore during 2008-09 and ranked 3rd in the overall list. Interestingly, Sudhir Mehta, chairman of the Torrent Group draws a salary of Rs6.87 cr, which is nearly one third of Bhatt’s!
Vivek Jain of Gujarat Flourochem dropped to third place in the latest list from first place in the previous year, as his total emoluments dropped 12% to Rs18.18 crore in 2009-10 compared to Rs20.73 crore in 2008-09. There was a big change in the rankings of highest-paid executives as five of the top executives of Gujarat Inc. decided to draw lower salaries and perks from their companies in 2009-10 compared to the previous year.
Going against the general trend to increase one’s emoluments, Adani Group chief Gautam Adani and his brother Rajesh Adani decided to draw lower salaries and commissions from their companies. Gautam Adani’s total emoluments fell 82% on account of drawing lower commission. He drew Rs3.62 crore in 2009-10 from Adani Enterprises Ltd (AEL) and Mundra Port & SEZ (MPSEZ), against Rs20.02 crore in 2008-09, even though profits of both the companies registered a rise of over 50%. His ranking fell to 10th from second in FY09. Following in the footsteps of his elder brother, Rajesh Adani, MD of AEL, took Rs2.71 crore as total compensation against Rs9.95 crore in 2008-09 - a cut of 73%. JR Vyas of Dishman Pharmaceuticals and Prayasvin Patel of Elecon Engineering too lowered their salaries and perks by 15% and 5% respectively.
“The step by Adani Group promoters to lower their commission in profits despite a steady increase in their companies’ profits is a welcome step. The decision, aimed at preserving cash, is in the interest of the companies,” said Nilesh Kotak, MD, Dhanvarsha Fincap Pvt Ltd.
Fourth on the list was CMD, Ratnamani Metals, Prakash Sanghvi, who moved three positions up from seventh last year. Sanghvi drew Rs7.08 crore in 2009-10, a rise of 41.6% over Rs5 crore drawn in 2008-09. The company’s net profit increased by just over 14% in 2009-10.
Sudhir Mehta, chairman of Torrent Power, moved a rank up to fifth, with his total package being Rs6.87 crore compared to Rs5.62 crore earlier, a rise of 22%. Samir Mehta of Torrent Pharma earned Rs5.79 crore compared to Rs4.34 crore earlier - a rise of 33%. Net profits of Torrent Power and Torrent Pharma went up by 106% and 25% respectively in 2009-10. Nilesh Kotak said, “Some promoters prefer higher pay instead of higher dividends to avoid double taxation - once on the profits of the company and then as dividend distribution tax. Promoter’s salary and commission should be linked to company’s overall performance.”
Interestingly, Sharvil Patel, deputy MD, Zydys Cadila, could see a big jump in his emoluments in the current fiscal. Upto 2009-10, he was allowed Rs1.1 crore as compensation from the company, which has now been revised to up to 5% of the company’s net profit from 2010-11. As such, Patels of Zydus Cadila Group could continue to hold top positions in the list in the coming years too.
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