The debate on the CEO salary issue continues to rage and elicits the most diverse of reactions amongst India Inc. In Lucknow to attend the ?Samvit ?09?, the CEOs conclave on ?Emerging Pillars of the Indian Economy?, Kalpana J Morparia, CEO of JP Morgan, and Ajit Balakrishnan, founder and CEO of Rediff.com, offered diverse views.
While Morparia was of the view that in a free market, shareholders must be left to decide how much salary the CEOs should draw and the ?answer to social causes is philanthropy?, Balakrishnan, on the other hand, said there should be some kind of societal intervention because it was ?shameful to draw such outlandish salaries?.
Speaking on the sidelines of the conclave, Morparia said while most companies engage in corporate social responsibility (CSR) and most CEOs sign cheques for social causes, it is their minds that need to be engaged. ?A reduction of the CEOs? salary will in no way eradicate poverty in the country. The answer to that problem is philanthropy. A CEO?s mind should be engaged in social causes in order to reduce the inequality. If our minds are engaged, we can bring the same kind of commercial success to the venture that we bring to our business,? she said.
However, Balakrishnan said, ?The salaries of CEOs have gone over the top in India. I am as aghast as anyone else as to how much could be needed to live a decent yet dignified life. We may justify the salaries by saying that the shareholders fix them, but we should be sensible to the needs of society too,? he said.
IIM Lucknow director Devi Singh also felt that there is only as much that is needed for a person to lead a decent life. ?Even in our institute, we teach our upcoming CEOs that when they would go out in the world, no one would know how rich they are or who they are unless they do something for others. So this streak of societal responsibility has to be inculcated from the beginning,? he said.