HDFC Bank chief Aditya Puri takes 10.5% salary cut, earns Rs 2.64 lakh per day
As per provisions of the Income Tax Act, Puri's salary for FY18 was Rs 7.26 crore, as against the Rs 8.12 crore he was paid in 2016-17
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Beena Parmar
Moneycontrol News
HDFC Bank's Managing Director and Chief Executive Officer Aditya Puri has taken a 10.5 percent cut in his fixed salary for the financial year 2017-18.
As per provisions of the Income Tax Act, Puri's salary for FY18 was Rs 7.26 crore, as against the Rs 8.12 crore he was paid in 2016-17.
However, his basic salary in FY18, at Rs 4.53 crore, was 15 percent higher than in FY17.
Puri's total remuneration, including stock options (minus those exercised) and other variables, declined by almost 4 percent on year to Rs 9.65 crore.
This is expected to increase to over Rs 10 crore though, after the Reserve Bank of India approves his performance bonus.
In FY17, the head of the second largest private bank in the country received a bonus of Rs 92.31 lakh.
Puri's total pay is still a handsome amount when compared to that of the Chairman of State Bank of India (SBI), who now makes a paltry Rs 14.26 lakh per year (down from Rs 14.70 lakh in FY17).
During the year, Puri exercised employee stock options worth Rs 31.4 crore. In FY17, he had exercised stock options worth Rs 57.4 crore.
The HDFC Bank chief's average earnings per day is now Rs 2.64 lakh, slightly lower than the Rs 2.75 lakh a day he made last year.
HDFC Bank's performance
Although the difference from a year ago may not seem large, the reduction in Puri's salary is in spite of the bank's robust performance.
The pay cut stands out at a time when the lender's peers ICICI Bank and Axis Bank are struggling with their profitability and mounting bad loans.
For the quarter ended March, HDFC Bank's net profit increased 20 percent year on year to Rs 4,799 crore. For the full fiscal year 2017-18, it rose 20 percent to Rs 17,487 crore.
The average profit of the bank for the past three years stood at Rs 18,246 crore.
Puri (67), who has held the position of the CEO and MD at HDFC Bank since 1992, is set to end his tenure on October 31, 2020.
The bank has announced its plans to begin the process of finding Puri's successor 18-24 months ahead of his retirement.
"With respect to the tenure of the current Managing Director ending in October 2020, the Board will identify a successor and work to ensure that this is done in a manner that will allow appropriate time for an effective transition of responsibilities," the bank said.
Other top management salaries
The rest of the senior management such as Paresh Sukthankar, deputy MD and Kaizad Bharucha, executive director of the bank earned nearly 14 percent and 10.5 percent lower basic salary from a year ago.
Sukthankar's total compensation stood at Rs 5.30 crore in FY18, down from Rs 6.08 crore.
Whereas, Bharucha's total remuneration was at Rs 4.33 crore, from 4.66 crore a year ago.
In FY18, HDFC Bank's total outlay to the senior management declined by 7.2 percent to Rs 19.28 crore (from Rs 20.80 crore in FY17).
The annual report says that the percentage increase in median remuneration of employees in the financial year was 11.17 percent for FY18 as against 11.12 percent in FY17.
Puri's leadership
Puri left a lucrative Citigroup position working for two years to become the founding CEO of HDFC Bank back in 1992.
Under his leadership, HDFC Bank has become the largest valued bank in India and among the top three of India's largest firms by market capitalisation. The market value of the bank currently stands at about Rs 5.22 lakh crore.
Last month, Puri's name featured in the list of world's 30 best CEOs in the ‘Growth Leaders' category by premier financial magazine Barron's.
Original Source: https://www.moneycontrol.com/news/business/companies/hdfc-banks-aditya-puri-takes-10-5-cut-in-fixed-salary-for-fy18-earns-rs-2-64-lakh-a-day-2592211.html