Kaun banega crorepati? In corporate India, the answer seems to be — more and more. Why? Because Indian industry is fast producing a new tribe of managers earning more than Rs 1 crore in annual cash compensation.
Mandates to hire managers with compensation packages higher than a crore are growing by 25-30%, according to headhunters such as Amrop India, Stanton Chase India, EMA Partners, Michael Page, Korn Ferry and Heidrick & Struggles.
EMA Partners closed 75-80 searches with crore-plus salaries this year after 60-65 in 2013. Amrop India, handled over 25 searches in 2014, compared with 20 searches in 2013, while Michael Page said it saw 100% growth in such hiring. “We are seeing a lot of hiring (with salaries going over a crore) this fiscal year (ending March 31),” said Ankit Agarwala, director at Michael Page.
In the past eight months, Stanton Chase India has placed 35-40 seniors with annual salaries of Rs 1-5 crore. “This does not include ESOPs (employee stock options) or long-term incentives which are considered part of wealth-creating initiatives,” said Bish Agrawal, chairman of Stanton Chase India.
At IIT placements earlier this month, 40 students got crore-plus salary offers, including ESOPs. The rise in the number of croreplus salary offers can be attributed to improved market sentiment, both within India and outside — especially the US — and the rush to fill up positions across sectors, say experts. Flush with funding, ecommerce companies are doling out attractive pay packets to critical talent, and that is influencing salaries elsewhere as well. The exact number of managers earning crore-plus salaries is hard to ascertain. But 646 managers fall in that category among BSE 500 companies as of March 2014, an ETIG study of compensation data filed by these listed companies revealed. This was 175 more than the number four years earlier.
Listed companies probably account for just about 30% of the overall numbers of executives earning crore-plus salaries, said K Sudarshan, regional managing partner (Asia) at EMA Partners. “Beyond the listed companies which disclose compensation information for their executives, there are multinationals including banks, unlisted holding companies of Indian business conglomerates, PE firms, consulting firms and others who do not disclose compensation information,” he added.
“The sectors where we mostly see such (croreplus) hires are healthcare, telecom, media and financial services,” said Agarwala of Michael Page. “We are seeing an increase in such requests for managing directors, sales and commercial heads for MNCs as well as CFOs and HR heads for operations in India and for global responsibilities.”
In new-age sectors like e-commerce, logistics solutions, retail and healthcare including private equity-backed businesses, the total compensation offered to CXO-level executives like business leaders and general management is extremely aggressive and would be typically 30-50% higher than in fiscal 2013-14, said Mayank Pande of Amrop.
Compensation packages have become fatter by about 25% in the past 12-18 months for senior hires across all sectors, Heidrick & Struggles’ partner Gauri Padmanabhan said.
“This is primarily led by the rise and expansion of start-ups. And, with the elections over, the sentiment across all verticals is high.” For Korn Ferry, many of the searches took place in verticals such as e-commerce, retail, digital media and technology or consulting. “For the coming year, we see that these verticals would continue bringing in an increasing amount of business.
Sectors like life sciences and manufacturing will also pick up in the coming year,” said Navnit Singh, chairman and country head of Korn Ferry India. For the firm, the spotlight fell on the ecommerce sector in 2013 itself when it decided to hive off e-commerce hiring to a new vertical. (Source:ET)