Executive Compensation in Promoter-Managed Firms in India

During the last decade, several Indian listed companies have faced significant backlash over excessive compensation awarded to their promoter executives, often seen as misaligned with the company’s financial performance. In 2018 for instance, Apollo Tyres was severely criticized from the business media, proxy advisory firms and shareholders over high compensation of the promoters Onkar Singh Kanwar and his son Neeraj Kanwar despite the firm’s operational challenges and market volatility. Similarly, in 2021, Eicher Motors experienced shareholder discontent when Managing Director Siddhartha Lal’s salary was proposed to be raised to ₹21.13 crore. In 2019, Balaji Telefilms faced criticism for
high pay packages awarded to the Managing Directors Shobha Kapoor and Ekta Kapoor. Critics were unhappy about the disproportionately high pay packages, given the company's volatile financial performance and rising costs. Sun TV
Network's Kalanithi Maran also sparked controversy for earning ₹77.92 crore in the fiscal year 2016-2017, with his wife Kavery Kalanithi drawing a comparable amount, leading to intense debates on executive compensation in promoter-led
firms. Broadly, these stories underscore the ongoing concerns about excessive promoter compensation and the critical need for aligning promoter executive pay with the financial health and performance of the company, ensuring that the minority shareholder interests are safeguarded.