5_6172709873776590888

OC 

www.businesstoday.in I July 15, 2018 I `100 

Whither 

recovery in 

exports? 

CLOUD OVER 

DIGITAL 

ADVERTISING 

INDIA'S 

HIGHEST 

PAID CEOs 

HOW PAY MATCHES WITH PERFORMANCE 

FOR PROMOTERS AND PROFESSIONALS

FROM THE EDITOR 

The Corner Room Pay 

CEO COMPENSATION debates in India and abroad are always 

contentious and have grown more contentious over the past couple 

of decades as better reporting norms of executive pay have come into 

effect, as have newer ways of compensating CEOs. The general feeling 

among lesser mortals is that CEOs are vastly overpaid. There is some 

basis to that feeling – CEO salaries have gone up even in bad years 

for the economy and have gone up much faster than average compensation. 

According to a Bloomberg study, listed Indian company CEOs earn 229 

times more than the average worker in their company. (The gap is even 

higher between the CEO salary and salary of the entry-level executive.) 

Similarly, another study shows that in the past few years, the wage bill of the 

top 500 companies have gone up sharply – but that rise has much to do with 

the rise in the salary and other compensation offered to its top managements 

than to the average worker. 

The discussion should be a little more nuanced, in my opinion. An 

examination of CEO pay in India and globally shows that currently, much 

of the compensation offered to them consists of variable, performancebased 

pay. In India, the fixed component of the compensation of a CEO is 

generally no more than 40 per cent. The remaining come from bonuses 

and stock options, which are tied to revenue, profit and stock market value 

growth targets. There are also limits prescribed by the government. The 

Companies Act specifies that the total remuneration for the top management 

of a company (which includes the CEOs, directors, etc.) cannot cross 11 per 

cent of the net profits of the company, without express permission of the 

government. Of course, this only applies to listed companies. Recent news 

reports suggest that the government might even liberalise those ceilings. 

(Fun fact: Till about 1990, before the economic reforms, CEO and executive 

chairman salaries of listed companies in India were capped by the salary of 

the President of India, which ensured that most CEOs got less than `15,000 

as overall compensation. This in turn was made up by offering them all 

sorts of perks, which were not very transparent.) But the point here is that 

CEO compensation is often dictated by the short-term performance target 

(through annual bonuses linked to revenue and profit growth) and long-term 

incentives (through stock options linked to tenure and market cap goals). 

The other big issue that crops up in CEO pay discussions is the Principal 

(promoter CEO salaries) vs Agents (professional CEO compensation) 

debate. However, that is becoming less relevant as even professional CEO 

compensation is increasingly being linked to long-term stock performance 

through ESOPs and hence the original dichotomy is blurred. 

Our special survey of highest-paid CEOs in India (research by Niti 

Kiran, and anchored by Ajita Shashidar and Sonal Khetarpal) shows some 

interesting facts. The top-paid professional CEOs in India derive much of 

their compensation for the long-term service in the company and their role 

in shaping its performance over the years. Almost 60 per cent of their pay is 

typically derived from risk-based pay. In 2013/14, it was not more than 40 

per cent. And finally, the huge gap between salaries of top promoter CEOs 

and top professional CEOs is coming down. 

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JULY 

15, 2018 

VOLUME 

27 

COVER BY 

Nilanjan Das 

NUMBER 

14 

COVER STORY 

PAYBACK TIME 

FOR CEOs 

A sneak peek 

into the hows 

and whys of 

CEO compensation 

in the 

country 

30 

ILLUSTRATION BY RAJ VERMA 

62 

66 

GAINING CURRENCY 

Companies of all hues, 

including old warhorses, are 

now betting on stock options 

to ensure employee loyalty 

CAUTION RULES 

E-commerce companies 

are now more conscious 

than ever about 

employee benefits

12 

THE 

BUZZ > 

THE ICICI SUCCESSION 

Even as a former 

Supreme Court judge 

examines allegations of 

impropriety, the bank 

has to return to normal 

functioning 

BUSINESS- 

TODAY.IN > 

STAY CONNECTED WITH US ON 

www.facebook.com/BusinessToday@BT_India 

90 

THE 

HUB > 

DRAWING THE 

DIGITAL CURTAINS 

The clear and present danger of personal data being 

leaked or stolen has been recognised. But India’s 

proposed law to prevent it needs to work out several 

issues before it can be finalised 

116 

THE BREAKOUT ZONE > 

PERSPECTIVES 

Why an Escalating Trade War with US Will Further 

Weaken the Currency Value Against $ 

The rupee has been depreciating for quite some 

time now because of trade deficit and higher 

current account deficit 

businesstoday.in/US.tradewar-rupee 

Airtel Row: Emotional Intelligence over 

Artificial Intelligence 

The customer care teams need to be sensitised 

about the issues that can cause irreparable 

damage to the brand 

businesstoday.in/airtel-customer 

Is the Patanjali Phenomenon Fading Out? 

Industry experts point out that Patanjali has to 

be more focussed. Instead of carpet bombing the 

market by entering into every possible category, 

the advice is to select high-growth and highmargin 

segments and focus on them 

businesstoday.in/patanjali-growth 

How Decline in New Product Launches Is 

Impacting Indian Pharma Industry 

Domestic market sales of new product launches 

now is about 2-2.5 per cent compared to about 

3-4 per cent three-four years ago 

businesstoday.in/pharma-newproducts 

NO WINDOW TO THE WORLD 

Claustrophobics, brace yourselves; 

Emirates is experimenting with 

windowless aircraft 

118 

BOOSTING 

ONLINE PRIVACY 

A host of browser 

extensions can help 

you keep away sites 

tracking you 

NEWS 

Maharashtra to Set Up Artificial Intelligence 

Clusters with Canadian Help 

Maharashtra is the first state to come out with 

a comprehensive cloud policy that has 

enabled the government to shift its operations 

to cloud computing 

businesstoday.in/maharashtra-cloud 

An 

Feature 

From time to time, you will see pages titled “An Impact Feature” 

or “Advertorial” in Business Today. This is no different from an 

advertisement and the magazine’s editorial staff is not involved 

in its creation in any way. 

Niti Aayog Plans Comprehensive Trade Margin 

Regulation on Medical Devices 

So far, only 23 medical devices have been 

notified as drugs and regulated under the 

Drugs and Cosmetics Act 

businesstoday.in/medical.devices-nitiaayog 

10 I BUSINESS TODAY I July 15 I 2018

P.14 

RUPEE: NEGATIVE 

OUTLOOK 

P.14 

SUNSHINE 

AT HALOL 

P.16 

TRADE WAR 

ESCALATES 

BANKING 

THE ICICI 

SUCCESSION 

EVEN AS A FORMER SUPREME 

COURT JUDGE EXAMINES 

ALLEGATIONS OF IMPROPRIETY, 

THE BANK HAS TO RETURN TO 

NORMAL FUNCTIONING. 

By ANAND ADHIKARI 

ILLUSTRATION By AJAY THAKURI 

AFTER CHANDA KOCHHAR, 

what now? With its Chief 

Executive Officer on leave 

pending allegations of 

conflict of interest, ICICI has 

brought in its senior-most executive 

Sandeep Bakhshi as Chief Operating 

Officer. The move works both ways. 

Should Kochhar be cleared and 

return, Bakhshi will remain COO 

– a confidence building exercise for 

the bank’s unhappy institutional 

investors. On the other hand, if 

Kochhar doesn’t return, Bakhshi 

could be a comforting choice for CEO. 

Insiders say the bank’s board is 

already debating bringing in more 

independent directors. For the interim, 

the entire management will report to 

Bakhshi who reports to the board. 

An old ICICI hand, what goes 

against Bakhshi, is his reputation 

of being conservative. In 2002, 

he was asked to build up ICICI’s 

general insurance business and 

then returned as Deputy Managing 

Director to head retail banking. 

When the baton passed from KV 

Kamath to the then-young Chanda 

Kochhar, many senior executives 

walked out. Bakhshi stayed – he 

replaced V Vaidyanathan as CEO 

of the bank’s largest life insurance 

subsidiary. 

In the current scenario of 

slipping asset quality, Bakhshi’s nonaggressive 

style (quite removed from 

the aggressive growth management 

that ICICI traditionally favoured), 

may well prove the best choice. The 

question is, since he’s been away 

from banking too long, will that 

prove a limitation? 

@anandadhikari

THE BUZZ 

CURRENCY 

THE RUPEE 

TOLL 

PHARMA 

SUNSHINE 

AT HALOL 

THE LIST OF NEGATIVES for rupee value against 

the US dollar is increasing by the day. It all 

started with higher crude oil prices and now 

there are talks of an imminent trade war with the 

US where India enjoys a trade surplus. 

Where is the Rupee headed? In just six 

months it depreciated by over 7 per cent from 

`63 levels in January this year to `68 levels. This 

sharp depreciation places the Indian Rupee 

among the worst performers in emerging 

markets. 

With yields up in the US market, the 

resultant outflow of US dollars from emerging 

markets including India, compounded by weak 

domestic macros, India faces a perpetual trade 

deficit. A trade war with the US will weaken the 

Rupee further as India enjoys a trade surplus 

with the US. If our exports are hit, the trade 

deficit and CAD will further widen, while higher 

interest rates abroad will restrict the dollar 

inflows into India. The long-term outlook for the 

Indian rupee looks negative. – Anand Adhikari 

7% 

Rupee 

depreciation 

from 63 levels in 

January this year 

to 68 levels. 

OFFICIALS AT SUN Pharmaceutical 

Industries heaved a sigh of relief 

in mid-June after the United States 

Food and Drug Administration (FDA) 

pronounced that the firm’s plant in 

Halol, Gujarat was cleared. The ‘Voluntary 

Action Indicated’ (VAI) tag effectively 

means no major problems 

were detected by US FDA inspectors 

in an inspection this February. 

For Sun Pharma this means it can 

start manufacturing from Halol 

again. This is crucial because the Halol 

plant accounted for almost 15 per 

cent of Sun’s overall revenues and 

over 20 per cent of its US earnings 

when it failed the FDA’s standards in 

2015 and then again in 2016. 

This time round, the VAI tag 

came because of rectifiable flaws – 

cracked, uneven surfaces that were 

dificult to clean, dirty gaskets, and 

poorly written machine procedure 

manuals. Hopefully, Sun Pharma 

learns from its past mistakes and 

grabs the lifeline it has been handed. 

- P.B.Jayakumar 

PETRO-DEBT 

BOND 

TROUBLE 

IN THE FACE of widespread 

criticism over its decision to 

tax petroleum products 

heavily, interim finance 

minister, Piyush Goyal 

blamed the UPA and 

its mismanagement 

of finances. 

Under UPA 2 

petro products 

were heavily 

subsidised. 

And, when funds 

proved quite 

inadequate the exchequer 

issued oil bonds (that had 

long-term maturity 

commitments). 

Goyal says the NDA 

inherited `1, 30,000 crore 

worth of oil bonds that will 

start maturing in the next 

four years. The NDA regime, 

he said, had already paid 

`40,226 crore as interest on 

these bonds. 

What the minister 

refrains from discussing, 

however, is how the NDA 

missed its chance to recoup 

losses. When crude oil prices 

were subdued, the NDA 

regime managed to clean up 

the books of oil 

companies, but didn’t do 

anything about the oil bonds. 

Had it done that, 

the government would have 

slashed its losses on interest 

on the oil bonds as well as 

their maturity value. 

- Anilesh S. Mahajan

THE BUZZ 

IPO MARKET 

SEBI's 

Reforms Push 

THE BOOMING primary 

market has got a boost from 

the Securities and Exchange 

Board of India. The financial 

disclosure requirement for 

companies going for IPOs has 

been reduced from five years 

to three years. The grading 

of IPO has also been done 

away with. For broad-basing 

investor participation and 

better price discovery, it has 

also broadened the anchor investor 

category by including 

insurance companies, private 

equity and venture capital 

funds. The new regulation 

for making price band announcement 

two days before 

the issue from the earlier 

five is also in line with global 

standards. These guidelines 

will go a long way in boosting 

the confidence of issuers and 

investors. - Anand Adhikari 

TARIFFS 

TRADE WAR 

ESCALATES 

The global trade wars have widened with India joining the EU 

and China in imposing retaliatory higher tariffs on imports 

from the US. India raised duties on 29 products from the US, 

including American apples, almonds, walnuts and stainless 

steel products after the US hiked import duties on steel (25 

per cent) and aluminium (10 per cent). India is the largest 

importer of almonds from the US. As far as India is concerned, 

during the first nine months of FY2018, iron and steel exports 

to the US were $ 309 million while articles of iron and steel 

exports amounted to $1.35 billion. However, India’s biggest 

export item is petroleum products, followed by ITeS. The US 

accounted for 57 per cent of India’s total ITeS exports of $111 

billion in FY2017. Those big ticket items are still not hit, but 

things could get ugly if it spreads. - Anup Jayaram. 

Read page 84 to know why our export growth has not taken off 

AIR INDIA 

DEEPER 

IN THE 

RED 

FOR AIR INDIA, 

the situation 

might turn from 

bad to worse. In 

the recently-concluded 

disinvestment 

process, the 

government could 

not find a single 

buyer for the 

national carrier. It 

is now reviewing 

its strategic sale 

process in the light 

of changes in the 

aviation sector. According 

to reports, 

the government 

has asked the 

airline oficials to 

submit a revival 

plan before seeking 

fresh funds. AI 

has delayed salaries 

of its employees 

for over three 

months. It posted 

operational profits 

of `298.03 crore in 

2016/17, but due to 

high interest cost, 

reported net losses 

of `5,765.16 crore. 

But as the market 

situation gets 

tougher – high fuel 

costs, forex fluctuations 

and rising 

competition – 

there are chances 

that it might report 

operational losses 

in the current 

financial year. 

That means it 

will need more 

cash in future. Its 

historical cash 

burn rate – based 

on the 2012-approved 

turnaround 

plan – is over 

`3,714 crore. With 

impending general 

elections, another 

strategic sale 

attempt looks like 

distant reality, and 

even the murmurs 

of a possible listing 

seem far-fetched. 

Though the strategic 

sale was a tacit 

admission by the 

government that 

it does not have 

the wherewithal to 

run AI, things have 

unfortunately 

gone back to 

square one. 

– Manu Kaushik

THE BUZZ 

GRAPHITI 

INDIA NOT 

CALLING 

In May, foreign tourist arrivals 

in India fell for the first time 

since June 2013. Here are 

some quick trends. 

Graphic By Tanmoy Chakraborty 

Research By Niti Kiran 

Foreign tourist 

arrivals fall... 

57.2 % 

GROWTH IN FOREIGN 

TOURIST ARRIVALS 

ON E-TOURIST VISA 

IN 2017 COMPARED 

TO 142.5 PER CENT 

4.5 

GROWTH IN 2016 

Mn 

FOREIGN TOURISTS IN INDIA 

DURING JAN-MAY 2018 

COMPARED WITH 4.2 MILLION 

IN THE CORRESPONDING 

PERIOD A YEAR AGO 

15.7 % 

SHARE OF BANGLADESH 

IN FOREIGN TOURIST 

ARRIVALS IN INDIA IN 2016 

25 

(Y-o-Y % change) 

20 

15 

10 

5 

0 

-5 

June 2013 May 2018

-1.9 % 

YEAR-ON-YEAR 

DECLINE IN FOREIGN 

EXCHANGE EARNINGS 

THROUGH TOURISM IN 

MAY, THE FIRST 

IN 30 MONTHS 

1.2 % 

SHARE OF INDIA IN 

INTERNATIONAL 

TOURIST ARRIVALS 

IN 2016 

25 th 

INDIA’S RANK IN 

INTERNATIONAL TOURIST 

ARRIVALS IN 2016 

7 Mn 

NEW JOBS CREATED 

WORLDWIDE IN THE 

TRAVEL & TOURISM 

INDUSTRY IN 2017 

…impacting foreign 

exchange earnings 

from tourism 

3,200 

2,800 

2,400 

2,000 

1,600 

($ million) 

1,200 

May 2016 May 2018 

Source: CMIE

CALENDAR 

THE BUZZ 

URBANISATION AND 

POVERTY 

WHAT: 5th Urbanisation and 

Poverty Reduction Research 

Conference 

WHEN: September 7, 

Washington DC 

WHAT TO LOOK FOR: The World 

Bank event will bring together 

academics and development 

practitioners to discuss questions 

relating to the spatial organisation 

of cities and economic growth. In 

particular, the conference will be 

focussing on effective land and 

transport policy in cities and the 

implications of urban development for 

national growth. 

TOWARDS GENDER DIVERSITY 

WHAT: CII Workshop on "Gender 

Diversity and Inclusivity in 

Manufacturing" 

WHEN: August 2, Mumbai 

WHAT TO LOOK FOR: The workshop 

will highlight the need for gender-diverse 

organisations in manufacturing. Various 

studies have shown that a gender-balanced 

organisation can improve employee 

retention, innovation and financial 

performance of a company. 

11 

10 

9 

8 

7 

6 

5 

4 

3 

2 

1 

31 

30 

SECURING DATA 

WHAT: Global Summit on "Data 

Protection, Privacy & Security" 

WHEN: July 27, Bengaluru 

WHAT TO LOOK FOR: The draft 

data protection framework is 

likely to be made public in July 

and the expert group headed 

by former Supreme Court judge 

B.N. Srikrishna is busy finalising 

its recommendations. Assocham 

is organising the second summit 

on “Data Protection, Privacy & 

Security in the world of Digital 

Economy – Reforms, Challenges 

& Opportunities”. 

29 

12 

CALENDAR 

28 

13 

THE BLOCKCHAIN 

ADVANTAGE 

WHAT: Blockchain Innovation 

Summit 

WHEN: July 11, New Delhi 

WHAT TO LOOK FOR: Blockchain 

technology is likely to find 

applications in a wide range 

of areas. It is expected to help 

businesses bring about greater 

transparency, enhanced security, 

increased eficiency and speed in 

transactions, reduced costs and 

removal of intermediaries. The FICCI 

summit will debate the potential of 

blockchain with participants from the 

government and the industry. 

14 

15 

16 

17 

18 

19 

20 

SUPPORTING ENTREPRENEURS 

WHAT: Conference on "World 

Entrepreneurs' Day" 

WHEN: August 21, New Delhi 

WHAT TO LOOK FOR: The Global 

Entrepreneurship Index has placed 

India at the 68th spot, the country's 

best ranking so far. The conference will 

discuss various programmes, schemes 

and incentives announced and set up by 

the concerned ministries at the Centre 

and the states for developing start-ups 

and encouraging entrepreneurship. 

21 

22 

23 

24 

25 

26 

27 

PRIMER FOR EXPORTERS 

WHAT: CII Tradelink Summit 

2018, Karnataka 

WHEN: July 23-24, Bengaluru 

WHAT TO LOOK FOR: The event 

will bring together large, small and 

medium-sized exporters from across 

India and provide them with an 

opportunity to learn and exchange 

best trade practices. It will provide 

insights into changing fundamentals 

of globalisation, new business 

models, and technology and tools in 

accessing new emerging markets. 


GLOBAL BUSINESS 

US TRADE SPATS WITH 

CHINA, EU HEAT UP 

The US-China trade war intensifies as 

President Trump wants to draw up a list 

of Chinese goods worth $200 billion for 

an additional 10 per cent tariff. Earlier, 

$50 billion worth of Chinese goods 

were subjected to 25 per cent tariff, 

following which China said it would 

raise tariffs on $50 billion worth of 

U.S. exports. The EU is also taxing US 

goods worth $3.25 billion in response to 

new taxes on its aluminium and steel. 

GLOBAL SLOWDOWN AHEAD, 

WARNS WORLD BANK 

Although global growth remained at 3.1 

per cent in 2017 and 2018, World Bank 

expects it to edge down over the next 

two years as global slack dissipates; 

trade and investment moderate; central 

banks change policies and financing 

conditions tighten. However, growth 

in South Asia could go up to 6.9 per 

cent and 7.1 per cent in 2018 and 2019, 

respectively, mainly because factors 

holding back growth in India will fade. 

MERCARI PULLS OFF 

$1.2 BN IPO 

Tokyo-based Mercari, a flea market 

app, is eyeing expansion after its 

recent $1.2 billion IPO. Mercari sold 

43.5 million shares in the IPO, including 

additional stock via a greenshoe allotment. 

Investors in the US and Europe 

bought 7.9 million of existing stock and 

16 million of new shares. The company 

started its U.S. operations in 2014 but 

has tough competitors there in eBay, 

Amazon and Craiglist. 

GOOGLE TO INVEST IN 

CHINA’S JD.COM 

Google will invest $550 million in 

Chinese e-commerce firm JD.com 

as part of its strategy to build online 

retail business and expand in Asian 

markets. Now Google can leverage the 

Chinese firm’s logistics prowess while 

JD.com will benefit from Google’s 

technology and the Google Shopping 

platform for global sales. Google will 

also get around 1 per cent stake in the 

firm, backed by Tencent and Walmart. 

INTEL CEO RESIGNS OVER 

POLICY VIOLATION 

Intel CEO Brian Krzanich has resigned 

after his past consensual relationship 

with an employee came to light. A 

probe into the matter has confirmed a 

violation of the semiconductor giant’s 

non-fraternisation policy, which applies 

to all managers. Krzanich may walk 

away with $44.5 million based on severance 

agreements, disclosed in Intel’s 

2017 proxy statement. CFO Robert 

Swan will step in as interim CEO. 

CKI BIDS FOR AUSTRALIAN 

GAS PIPELINE FIRM 

A consortium led by Hong Kong’s 

Cheung Kong Infrastructure Holdings 

(CKI) has made an A$13 billion ($9.8 

billion) takeover offer for Australia’s biggest 

gas pipeline firm APA Group. The 

unsolicited offer may not go through 

due to regulatory hurdles as the country 

has recently tightened its foreign 

investment rules. Chinese investments 

in Australia fell to $10.3 billion in 2017, 

down 11 per cent from 2016. 


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‘DARK SOCIAL’ 

GetSocial, 

The new holy grail 

of marketing 

By Sonal Khetarpal 

Illustrations by Raj Verma 

WHEN MALAYSIA-based streaming 

service iflix wanted to increase its user 

base, it studied the behaviour of their 

most loyal customers. The finding 

was interesting – their best customers 

had one habit in common, which was 

sharing viral content, trailers, celebrity 

news and showbiz gossip with peers 

through messaging apps. 

Iflix then targeted more such users 

with this behaviour and was able to 

convert one million to paid subscribers 

within six months. In doing 

so, its brand awareness grew from 

zero to 25 per cent and the cost of 

acquisition fell from $25 to $3. 

Traditionally, digital media 

tools track metrics from shares on 

forums like Facebook and Twitter. 

But iflix identified and studied the 

behaviour of customers who share 

content on private messaging apps 

such as WhatsApp, Line, chat forums, 

LinkedIn/Twitter direct messaging 

and Facebook messenger. Traffic from 

these apps is ‘hidden’ from Google 

Analytics and is mentioned as direct 

traffic. Because of its hidden nature, it 

is called the ‘dark social’ and they can 

only be traced with niche tools such as 

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Po.st and AddThis. 

Dark social is being hailed as the 

holy grail for marketers as more users 

are sharing their brand preferences 

or content via private messaging. According 

to a report by RadiumOne, 84 

per cent of online sharing and brand 

conversations now happen through 

private chats. If companies can target 

them directly, they are more likely to 

hit the buy button. 

Pooja Gururaj, Lead, Channel 

and Social media, at VML India, says 

dark social has remained one of the 

most untapped potentials as the way 

to track and measure it is extremely 

niche. “There are tools to measure it, 

but they are not prevalently used as 

brands are gauging their utility and 

cost-effectiveness.” 

Before making big investments, 

brands are exploring the indirect route 

to test the water. Take the case of 

Ginger by Lifestyle that launched the 

digital marketing campaign #ImperfectlyPerfect, 

exploring the prejudices 

around unrealistic demands on beauty, 

size and other parameters imposed on 

women. “The idea is to strike a chord 

with our users and get them to talk 

about issues they can relate to and 

want to speak about and hence, 

become a part of their conversations,” 

says Srinivas Rao, VP of 

Marketing at Lifestyle. Although 

they did not do paid advertising, 

traffic on Ginger’s website went 

up 2x and online sales went up 

six times, he adds. 

Gururaj, however, says it 

will help most when brands 

start using the tools to track and 

measure the dark social. 

@sonalkhetarpal7

Missed 

Deadline 

FACEBOOK missed 

the June 18 deadline 

to respond to two U.S. 

Senators’ questions 

regarding its user data 

sharing with telecom firms. 

In a June 5 letter to CEO 

Mark Zuckerberg, Senators 

John Thune and Bill Nelson 

asked five questions on 

data sharing with device 

makers and asked whether 

his April testimony should 

be amended. The company 

has drawn flak after 

massive data misuse by 

consulting firm Cambridge 

Analytica and FB’s datasharing 

agreements with 

Chinese firms such as 

Huawei Technologies. 

CLEAN-UP DRIVE 

Consumer goods giant and the 

world’s second-biggest advertiser 

Unilever will not work with influencers 

(social media stars) who buy followers 

on social media platforms. However, 

it is keen to support those who are 

working to weed out ad fraud. Unilever 

has an overall marketing budget of 

more than $8 billion. 

SOCIAL MEDIA 

HUB LANDS 

IN COURT 

THE SUPREME COURT has 

agreed to hear a petition 

challenging the government’s 

decision to create a social 

media communication hub 

on the grounds that it is the 

Centre’s attempt to snoop on 

citizens and a violation of the 

Right to Privacy under the 

Indian Constitution. The government 

claims the hub is to 

inculcate a feeling of nationalism 

among citizens and 

help it understand the impact 

of Centre-run schemes. 

96 

93 

92 

25 

While the gap in the 

Internet use between 

developed and 

emerging economies 

has narrowed over 

the years, only 25 per 

cent Indians reported 

using the Internet or 

owning smartphones 

in 2017, according to 

a new survey by Pew 

Research Center. 

South Korea tops the 

list with 96 per cent 

adults reporting Internet 

usage, followed 

by the Netherlands 

(93 per cent), Sweden 

(92 per cent) and 

Canada (91 per cent). 

Pew polled more than 

40,000 respondents 

in 37 countries during 

February-May last 

year to come out with 

the data. 

Note: Percentages are based 

on total samples. 

July 15 I 2018 I BUSINESS TODAY I 27

THE BUZZ 

START-UP 

BOBBLE KEYBOARD 

A HOLISTIC INPUT APP 

THIS INDIC KEYBOARD APP ALSO 

CONVERTS SELFIES INTO GIFS 

AND COMIC STICKERS. 

By Devika Singh 

KEY NUMBERS 

FOUNDED IN 

2016 

PLAY STORE 

DOWNLOADS 

Over 5 million 

MONTHLY 

ACTIVE USERS 

3.6 million 

1) The Founders 

Ankit Prasad and Mohd 

Wassem came together 

in 2012 to set up a social 

media platform for artists 

in India. It had initially 

gained traction, but later 

on, the business stagnated 

due to a small market. The 

duo then pivoted to launch 

a personalised content app. 

Some tweaks later, their 

Gurgaon-based company, 

Talent Unlimited Online 

Services, came out with a 

feature-rich Indic keyboard 

app that helps users create 

content and share the 

same on social media and 

messaging platforms. 

2) The Backers 

According to start-up 

analytics firm Tracxn, Bobble 

Keyboard has raised around 

$3.7 million so far from SAIF 

Partners, Sachin Bansal, 

Dr Rakshita Shharma and 

others. The last round came 

from SAIF Partners in 2015 

as the start-up raised $3 

million in Series A. 

3) How It Works 

Bobble Keyboard works 

like any other smartphone 

keyboard. When a user 

downloads it, he/she can 

glide-type or voice-type 

messages and e-mails in 

22 Indian languages. Better 

still, users can create comic 

stickers and GIFs from their 

selfies and also create custom 

emoticons. It also offers 

dynamic GIFs and stickers, 

which means the app 

displays relevant icons on the 

screen when one is typing. 

4) Growth 

Bobble’s focus on regional 

and customised content has 

made it popular among 

young Indians. It claims 

to have 5 per cent market 

share in the Indic keyboard 

segment and three times 

more engagement than 

other third-party keyboards 

globally. While the app is free 

for users, it features clickable 

advertisements and relevant 

native content to generate 

revenue. The company 

has also partnered with 

several production houses to 

create GIFs and stickers of 

movies such as Padmavat, 

Padman and 102 Not Out. 

Additionally, Bobble has 

tied up with BookMyShow 

and Paytm to feature their 

campaigns on its platform. 

5) Challenge 

Its key competitor is Google 

Indic Keyboard whose 

market share in the segment 

is around 95 per cent. As 

smartphones come with preinstalled 

keyboards, gaining 

traction remains a challenge 

for all independent 

keyboard apps. 

DEMOGRAPHICS 91 

per cent of the users 

are in the 

18-34 age group 

REVENUE 

Over `60 lakh in 

FY2016/17 as per MCA 

data; losses stand at 

`8.6 crore during 

the period. 

EMPLOYEES 

29 

BOBBLE KEYBOARD CO-FOUNDER ANKIT PRASAD 

PHOTOGRAPH BY SHEKHAR GHOSH 


COVER STORY 

CEO SALARIES 

PAYBACK 

TIME 

FOR CEOS 

A PEEK INTO 

THE WHYS AND 

HOWS OF CEO 

COMPENSATION IN 

THE COUNTRY 


Illustrations by Nilanjan Das

COVER STORY 

CEO SALARIES 

A 

PALPABLE MYSTIQUE and aura pervades the corner 

office. Its occupants are at the wheel, often biting the 

bullet and taking paramount decisions. They take the 

flak for failures but also walk away with the honours 

when things go as planned, sometimes acquiring cult 

status. Think Jack Welch, Bill Gates, Steve Jobs. And, at 

home, Dhirubhai Ambani, N.R. Narayana Murthy, K.V. 

Kamath, Deepak Parekh. 

Superstar CEOs spawn fast-growing and hugely profitable 

corporations, racking up immense wealth for their 

shareholders. They are rewarded handsomely for their 

efforts and waltz into the league of the super rich. Business 

Today’s 'India’s Highest Paid CEOs' survey tosses up 

several such success stories. Head honchos, 

both promoters and professionals, who have 

assiduously built profit-spewing businesses 

over the years and are raking in mind boggling 

remuneration. Some of them already 

have a halo and their stories are a part of 

corporate lore. Sunil Mittal, Aditya Puri 

and A.M. Naik, among others. Some others 

may not be as well known yet but are on the 

threshold of entering the big league. Arvind 

Poddar, Sanjay Agarwal, Vivek Gambhir, et. 

al. Our study also puts the spotlight on the 

latest trends in CEO remuneration in India 

as companies scramble to find the right fit 

for the top job. 

`150.7 cr 

The remuneration 

of Tech Mahindra 

MD & CEO 

C.P. Gurnani in 

2016/17 

C.P. Gurnani, MD & CEO at Tech Mahindra, is the 

highest-paid professional CEO in corporate India, taking 

home `150.7 crore in 2016/17. His package grew by a 

whopping 233 per cent, up from `45.36 crore in 2015/16. 

A.M. Naik, Group Chairman of Larsen & Toubro (L&T) 

who recently hung up his boots, had a remuneration of 

`78.9 crore, growing 19.3 per cent over the previous year. 

Aditya Puri, MD at HDFC Bank and the third highestpaid 

professional CEO, saw a more than 100 per cent 

jump in his package, from `31.50 crore to `67.5 crore. 

These individuals are titans, taking their companies 

on an unprecedented growth trajectory over the years. 

Gurnani’s biggest contribution is turning around scamtainted 

Satyam Computer and successfully integrating 

it with Tech Mahindra. Naik transformed L&T into a 

global engineering and technology powerhouse. And 

Puri is credited with building India’s largest private sector 

bank in terms of assets. HFDC Bank also has the highest 

market capitalisation in the banking sector – it crossed 

`5 lakh crore early this year and is currently at `5.4 lakh 

crore. But has the recent jump in their remuneration kept 

pace with company performance? 

Tech Mahindra’s revenue grew over 10 

per cent in 2016/17 while profits dipped 4 

per cent. HDFC Bank’s net profit rose by 

18.3 per cent. 

The rise in CEO remuneration, then, 

doesn’t appear to reflect company performance. 

But there is more than meets the eye. 

A closer look reveals that the actual increase 

in remuneration is marginal. 

These CEOs have encashed the company 

stocks they hold, leading to a jump in their 

take home. Gurnani, for instance, exercised 

stock options worth `42.98 crore in 2015/16 

and another `147.17 crore in 2016/17. The 

rise in his fixed pay was only marginal, from 


TOP TEN HIGHEST 

PAID PROMOTER 

EXECUTIVES 

NA 

731 

KALANITHI MARAN 

Executive Chairman, 

Sun T V Network 

1,209.8 

PAWAN MUNJAL 

Chairman, MD & CEO, 

Hero MotoCorp 

77.9 

59.7 

1123 

MURALI K. DIVI 

Chairman & MD, Divis Laboratories 

46.5 

ONKAR S. KANWAR 

Chairman & MD, Apollo Tyres 

H. M. BANGUR 

MD, Shree Cement 

45.7 

38.2 

687.9 

JAYADEV GALLA 

VC & MD, Amara Raja Batteries 

ARVIND M. PODDAR 

Chairman & MD, Balkrishna Industries 

SANJAY AGARWAL 

MD & CEO, AU Small Finance Bank* 

SUNIL BHARTI MITTAL 

Chairman, Bharti Airtel 

S. P. OSWAL 

Chairman & MD, Vardhman Textiles 

26.7 

30.1 

32.5 

38.1 

35.2 

2,034 

891.31 

2,082.77 

Total remuneration 

2016/17 (` crore) 

Ratio of remuneration 

of director to median 

remuneration of 

employees 

840.91 

366.27 

GRAPHICS BY AMIT SHARMA 

This list includes only the promoter 

executive heads of the company for 

the year 2016/17 within BSE 500 companies; 

Total remuneration includes 

salary, perquisites, commissions, 

bonus, performance pay, contribution 

to PF, etc. and stock options in some 

cases; Figures in ` crore; this list excludes 

D. B. GUPTA & P. R. RAMASU- 

BRAHMANEYA RAJHA as they passed 

away in 2017; 

* Figures for FY17 are inclusive of 

bonus figures for 2015/16; 

Source: CMIE & annual reports 

`1.61 crore to `2.4 crore. 

The same holds for Puri, whose remuneration of `67.5 crore 

includes stock options worth `57 crore, given to him earlier. Naik’s 

compensation includes not only ESOPs (`19.01 crore) granted to him 

over the past several years by a subsidiary company, but also retirement 

benefits of around `38.04 crore. These trends don’t really show a 

high correlation between CEO remuneration and actual performance 

of companies but one thing is obvious: CEO packages are no longer 

about fixed pay but wealth creation. “CEOs take pride in the entire 

value building process,” says K. Sudarshan, MD of global executive 

search firm, EMA Partners. 

Indeed, the trends in CEO remuneration in India mirror what's 

happening globally. For instance, Elon Musk, CEO at Tesla, has been 

promised a mind-boggling $2.6 billion pay package. But there are no 


COVER STORY 

CEO SALARIES 

*3,537.72 

TOP TEN 

HIGHEST PAID 

PROFESSIONAL 

EXECUTIVES 

free lunches. Musk will be able to create 

such wealth for himself only if he is able 

to achieve incredible growth rates for 

the company year after year. The target 

for him is to lift Tesla’s market value to 

$650 billion, 11 times its current levels, 

if he wishes to earn the entire promised 

package. Similarly, Indian-born Nikesh 

Arora, who recently joined as the CEO 

of cyber security firm Palo Alto Networks, 

is one of the highest paid CEOs 

in the US. Arora earns $128 million, 

out of which $126 million are equity 

awards, half of which will vest if the 

shares more than double and the remaining 

part is linked to his staying 

with the company. 

In India too, CEO salaries are increasingly 

getting linked to the value 

they create for the businesses they are 

handling. Saugata Gupta, MD & CEO 

of the `6,322 crore Marico, is the highest 

paid FMCG CEO (`16.55 crore). So, 

what’s the logic behind Gupta earning 

more than the Hindustan Unilever 

CEO Sanjiv Mehta (`14.2 crore)? “The 

mandate given to Saugata would be to 

transform Marico into an FMCG behemoth. 

He will be part of the entire value 

creation process, hence the premium in 

his salary. Compensation won't be as 

important in the HUL CEO’s case as 

he is already heading a globally established 

business,” explains the MD of an 

executive search firm. 

The median increase in the salary 

of the top 10 highest-paid executives 

of India Inc is at 9.2 per cent. In the 

last six years, a 15.5 per cent annualised 

increase in shareholder value of the top 

100 companies by market cap corresponded 

to a 17.5 per cent annualised 

increase in emoluments of executive 

heads. “While profitability and revenue 

have been under pressure, the 

confidence in Indian corporates have 

led to high (PE) multiples which has 

led to high realised compensation 

for CEOs through stock linked pro- 

14.2 

C. P. GURNANI, 

MD & CEO, Tech Mahindra 

A. M. NAIK,^ 

Group Chairman, Larsen & Toubro 

ADITYA PURI, 

MD, HDFC Bank 

OM PRAKASH MANCHANDA, 

CEO & Whole Time Director, Dr Lal PathLabs 

GUENTER BUTSCHEK, 

MD & CEO, Tata Motors 

SAUGATA GUPTA, 

MD & CEO, Marico 

VIVEK GAMBHIR, 

MD & CEO, Godrej Consumer Products Ltd. 

ARVIND UPPAL, 

Chairperson & Executive Director, Whirlpool Of India 

AL RAJWANI, 

MD, Procter & Gamble Hygiene & Health Care 

SANJIV MEHTA 

MD & CEO, Hindustan Unilever Ltd. 

14.30 

15.34 

15.95 

16.55 

22.55 

33.2@ 

67.5# 

78.91 

Total remuneration 

2016/17 (` crore) 

150.71 

138.44 

94.56 

91 

188.15 

136 

377.07 

187 

338.61 

Ratio of director 

remuneration to median 

employee remuneration 

This list includes only the professional executive heads of the company for the year 

2016/17 within BSE 500 companies; Total remuneration includes salary, perquisites, 

commissions, bonus, performance pay, contribution to PF and stock options in some 

cases. Only those executives who have served the entire 2016/17 were considered; 

*Due to inclusion of the perquisite value of 24 lakh stock options granted in January 

2011 and 6 lakh in January 2014 and exercised during the year 

^Effective October 2017, he has stepped aside as the Group Executive Chairman, and 

has now taken up the role of the Group Chairman. Remuneration in 2016/17: Perquisites 

include value related to employee stock options granted over the past several 

years by a subsidiary company and exercised during the year, about `19.01 crore. 

Retirement benefits include encashment of accumulated past service amounting to 

`32.21 crore 

#This includes stock options granted and vested over several previous years, but 

exercised during the last financial year; fixed pay considered for computation of ratios 

@Salaries & perquisites includes Stock Related Perk of `29.89 crore arising on exercise 

of options and allotment of stock-based payment 

Source: CMIE and annual reports 

1,101.12 


“CEO PACKAGES 

OFTEN INCLUDE 

A VERTICAL 

ACCELERATOR ... 

THE MORE THE CEO 

ACHIEVES TARGETS, 

THE MORE HE/SHE 

CAN MAKE” 

Paul Dupuis, 

MD and CEO, Randstad India 

grammes,” points out Anubhav Gupta, Director, Consulting, 

Aon Hewitt. 

The top 10 highest-paid executives among the BSE 

500 companies include seven promoter executives: 

Kalanithi Maran, Chairman, Sun TV Network; Pawan 

Munjal, Chairman, MD & CEO, Hero MotoCorp; Murali 

K. Divi, Chairman & MD, Divis Laboratories; Onkar 

S. Kanwar, Chairman & MD, Apollo Tyres; H.M. Bangur, 

Chairperson & MD, Shree Cement; Jayadev Galła, 

Vice-Chairman & MD, Amara Raja Batteries; and Arvind 

M. Poddar, Chairman & MD, Balkrishna Industries. 

The roster of highest earning CEOs also includes 

three professional CEOs: C.P. Gurnani, A.M. Naik and 

Aditya Puri. 

A market like India has tremendous 

growth opportunities and no one wants 

to miss the bus. But, at the same time, 

the uncertain economic environment has 

slowed down the India growth story. 

The need of the hour is to have business 

leaders who can grow the business in 

difficult and uncertain times. Companies 

are moving towards long term performance 

based remuneration to ensure the 

top bosses have their skin in the game, says 

Sonu Iyer, Partner & Leader, India People 

Advisory Services, EY. They are looking 

beyond short term profitability and focusing 

on long term value creation. 

15 cr 

The annual salary 

of Mukesh Ambani, 

Chairman and 

MD of Reliance 

Industries, capped 

to set an example 

of moderation in 

compensation 

Pay for Performance 

The median increase in the salary of the top 10 promoters 

in 2016/17 is 8.6 per cent. An increasingly large number 

of promoter CEOs have a significant variable pay component, 

a key emerging trend. 

Traditionally, promoter salaries have not shown a 

strong correlation with company performance. Promoter 

CEOs till recently took home a large fixed salary and 

had been rather unapologetic about it. “Over the last few 

years, salary reporting norms have come up, the figures 

are publicly available and are scrutinised in media. Therefore, 

now there is a better linkage between their remuneration 

and company’s performance,” points out Paul 

Dupuis, MD and CEO at human resource 

consulting firm Randstad India. 

In fact, Mukesh Ambani, Chairman 

and Managing Director of Reliance Industries 

and the richest Indian, has capped 

his salary at `15 crore per annum since 

2009 to set a precedent of moderation in 

managerial compensation. Still, he is eligible 

for a hefty dividend on his company 

shareholding. The other promoter CEOs of 

India Inc seemed to have taken Ambani's 

move rather seriously. Apollo Tyres' Onkar 

Kanwar (at number seven in the overall 

list of top paid executives) took a cut in 

2016/17. His remuneration declined from 

`53.27 crore in 2015/16 to `45.7 crore in 


COVER STORY 

CEO SALARIES 

THE AGGREGATE PICTURE 

Remuneration has grown faster 

than total income and profits but 

matches market cap growth. 

34,01,207.6 

32,92,945.0 

35,69,164.2 

33,77,649.9 

1,231 

30,43,834.6 

641.0 

1020 

5.6 

749.2 

910.5 

17.5 

Aggregate 

Total Income 

Aggregate Total 

Remuneration 

Aggregate based on top 100 

companies by market capitalisation 

Source: Figures in ` crore 

2012/13 2013/14 2014/15 

2015/16 2016/17 5 YR CAGR (%) 

2016/17 after the company’s standalone net profit dipped 

20 per cent. Amara Raja's Jayadev Galla (at number nine 

in overall top paid executives) also took a cut – his remuneration 

reduced to `38 crore from `39.26 crore when 

the company’s net profit dipped 3 per cent. 

Indeed, the lion’s share of the promoter CEOs salary 

today is non-guaranteed pay (earlier it was the fixed 

component). The only exception is Bharti Airtel’s Sunil 

Mittal, whose entire remuneration is a fixed pay of `30.1 

crore. Sun TV’s Kalanithi Maran (at number 3 in the 

overall list), on the other hand, became richer in 2016/17 

because of his variable pay component. Out of his total 

remuneration of `77.9 crore, `64.7 crore was bonus. 

Galla of Amara Raja Batteries believes that the promoter 

CEOs have the right to take home a higher salary. 

“This is a fair approach for all promoter-directors because 

we have a long term view and will not sacrifice long-term 

growth for short-term results.” Galla's remuneration is 

divided into two parts – a salary of around `2 crore and 

the balance by way of commission (share in net profit of 

the company). Navnit Singh, Chairman and MD of India 

at management consulting firm Korn/Ferry International 

agrees. “Indian promoters are much more deeply 

involved in their company than their counterparts in the 

developed economies. It’s their money on the block hence 

they usually have higher salaries,” he says. 

However, for promoters, compensation doesn't have 

much meaning as they pocket substantial dividends, 

says Kris Lakshmikanth, Chairman & CEO of The Head 

Hunters India. Another senior executive of an HR firm 

said that promoters might be taking risk-based pay but 

their organisations have also figured out several other 

ways to reward them, such as by creating subsidiaries 

or new companies, so that it doesn’t get recorded in the 

balance sheet. 

Professional CEOs 

In the roster of highest-paid professional CEOs of India 

Inc, four of them are from the FMCG industry (Saugata 

Gupta of Marico, Vivek Gambhir of Godrej Consumer 

Products, Al Rajwani of P&G and Sanjiv Mehta of HUL). 

Interestingly, the CEOs of both the promoter-owned 

companies (Marico and Godrej) take home higher salaries 

than those of P&G and even HUL. “Most Indian businesses 

have created significant shareholder wealth and 

that is reflected in their CEO salary. In the case of MNCs, 

if not locally listed, their India business performance has 

very little bearing on their stock performance,” explains 

Sudarshan of EMA Partners. 

With Indian promoter-run companies becoming 

large entities, the owners are unable to run it alone. To 

sustain the growth momentum, they are willing to pay 


7.5 

2,62,320.8 

2,86,360.0 

3,03,891.8 

2,93,447.2 

3,46,399.2 

Aggregate Profit 

After Tax 

69,67,826.3 

52,55,097.3 

43,57,733.3 

15.5 

65,97,935.7 

81,59,987.0 

In ` crore; Aggregate financials based on 

standalone numbers; 

Total remuneration includes salary, 

perquisites, commissions, bonus, performance 

pay, contribution to PF and stock 

options in some cases 

Source: CMIE 

Aggregate Market 

Capitalisation 

a premium to their professional CEOs. Vivek Gambhir, 

MD at Godrej Consumer, for instance, was brought in 

2009 from Bain & Company as the Chief Strategy Officer 

for the Godrej Group. He was made MD in 2014 and has 

since then played a huge role in carving out the company's 

international growth. 

Companies are trying to ensure that CEOs get involved 

in the long-term value creation process. The idea 

here is to ensure that the CEO has higher accountability 

and stays with the company. 

Boards, therefore, are turning to longerterm 

CEO remuneration vehicles such as 

stock options, restricted stock and longer 

term performance awards. In the last few 

years, CEOs are being awarded through 

stocks while fixed pay and annual bonuses 

60% 

of CEO packages 

now come 

from variable 

components. The 

figure was about 

40 per cent some 

five years ago 

have been conservative. “The rationale is to 

put more compensation at risk so that the 

rewards are aligned with the company’s performance,” 

says Ronesh Puri, MD at headhunting 

firm Executive Access. 

The median increase in the remuneration 

of the top 10 professional CEOs in 

2016/17 has been 8.4 per cent. According to 

Aon Hewitt, almost 60 per cent of CEO remuneration 

now come from variable components. 

Long term and short term incentives were hardly 

40 per cent of the total remuneration some five years ago. 

Consider the example of India’s top paid executive. 

C.P. Gurnani took home `150.71 crore but almost `147 

crore came from stocks – some 24 lakh of these stock options 

were granted in January 2011 and another 6 lakh 

in January 2014. He joined Tech Mahindra in 2005 and 

is credited for the transformation of the company from a 

pure, telecom-centric firm into an IT major. Due to the 

increasing focus on stock options there are wide fluctuations 

in CEO remuneration year-on-year depending 

on when they get vested and when 

they are exercised. For instance, the package 

of HDFC Bank’s Puri includes abundant 

stock options. The remuneration of Marico’s 

MD surged 105 per cent, from `8.06 crore 

in fiscal 2015/16 to `16.5 crore in 2016/17 

because he encashed his stocks. 

This trend is only going to gather momentum, 

say experts, as it is considered an 

effective tool to retain top talent. Companies 

that are growing rapidly and are performance-oriented 

offer a high percentage 

of non-guaranteed pay, says Paul Dupuis, 

MD & CEO, Randstad India. “The focus on 

the performance of a CEO is paramount and 


COVER STORY 

CEO SALARIES 

often includes a vertical accelerator which means the 

more the CEO achieves the set targets, the more he/she 

can make,” he says. 

Many Indian companies, points out Dupuis, are becoming 

multinational companies. “As they bring in the 

best talent from outside, they have to commensurate the 

pay with what they are making and also have to align 

the package to the lopsided salary structuring mechanism 

of having more pay in the form of performance 

based bonus.” 

In fact, the trend is stronger among Indian promoter 

run companies (such as Godrej, Airtel and Marico). Indian 

promoter-led companies don’t have the brand equity 

of MNCs and to attract high quality CEOs they will have 

to offer more. “Also, there is a risk involved of not being 

able to ‘fit into’ the culture and work with the promoter. 

So such companies have to sweeten the CEO package, 

sometimes going all out,” says Suresh Raina, MD at Hunt 

Partners, a leadership talent advisory firm. 

In fact, it is also in such cases that signing bonus and/ 

or severance pay comes into play as a risk mitigation 

strategy, points out Raina. “Signing bonus is used to 

cover the loss incurred by the executives if they have to 

give up the bonus or incentive by leaving the company 

ahead of time,” he says. Similarly, severance bonus has 

always been there but as top jobs are not aplenty, CEOs 

use severance package as an insurance to protect their 

interest in case they are asked to leave the company 

prematurely, adds Raina. 

The life of CEO search companies though is becoming 

increasingly difficult, points out Sudarshan of EMA- 

Partners. “If a company wants to hire a CEO and the 

candidate is already sitting on stocks / options that are 

not vested in his existing company, the challenge for the 

hiring company will be not to just match the upside from 

the stocks as well as give him/her an increase. Sometimes, 

PHOTOGRAPH BY RACHIT GOSWAMI 

“MOST INDIAN BUSINESSES 

HAVE CREATED SIGNIFICANT 

SHAREHOLDER WEALTH AND IT'S 

REFLECTED IN THEIR CEO 

REMUNERATION” 

K. Sudarshan, 

Managing Partner, EMA Partners India 

SECTORS THAT PAY THEIR 

PROFESSIONAL CEOS THE MOST 

Sectors 

Average Total 

Compensation (`) 

SALARY COMPONENTS 

Fixed Bonus Long term 

incentives 

IT/ ITES 7,40,05,560 39% 26% 35% 

Manufacturing 6,95,59,510 46% 22% 31% 

FMCG 8,07,35,267 49% 23% 28% 

BFSI* 6,83,86,477 40% 30% 30% 

Pharma 5,48,99,082 52% 24% 24% 

*Includes Banking, 

NBFC and Insurance 

Source: Aon Executive 

Compensation 

Database; 

Companies with LTI 

Plan were considered; 

Average total compensation 

of professional 

CEOs from 66 

organisations 


COVER STORY 

CEO SALARIES 

HOW WE DID IT 

xecutive remuneration 

has been, and continues 

to be, an important issue. 

Therefore utmost care has 

been taken to cull out the 

data. We have sourced the data 

from Prowess, a CMIE database 

but to make doubly sure the 

data was further verified from 

published annual reports of 

companies. We have considered 

the total remuneration 

for our analysis which includes 

salary, perquisites, commissions, 

bonus, performance pay, 

contribution to PF and stock 

options in some cases. 

A universe of BSE 500 companies 

was evaluated to zero in 

on the list of top 10 highest paid 

executives which was further 

divided into promoters and 

professionals. We have 10 each 

in promoters and professional 

CEOs category. 

We have considered only the 

executive heads of the company, 

for the year 2016/17 within 

BSE 500 companies, for the 

listing. Moreover, only those executive 

heads who have served 

the entire fiscal 2016/17 were 

considered. 

these numbers are too high and it is outpriced in the 

market," says Sudarshan. There is a talent shortage too, 

points out Puri of Executive Access, of finding the right 

candidate. “Finding a CEO is like water, water everywhere, 

not a drop to drink,” he says. 

Most companies, especially the promoter driven 

companies, are going the extra mile to keep their professional 

CEOs motivated. “Pre-requisites such as house, 

cars, servants, club memberships, children’s education, 

health benefits and family vacation have become common. 

Sometimes there are flamboyant demands too,” 

says James Agarwal, MD at BTI Consultants, an executive 

search firm. He talks about a CEO who wanted to 

work from the US for 15 days, twice a year, and wanted 

the company to bear his travel expenses and not count 

it as leave. 

Are Indian CEOs Overpaid? 

According to a Bloomberg report, CEOs of listed Indian 

companies earn 229 times more than the 

average workers. India is ranked at the second 

position, right after the US. Similarly, 

data from top 500 BSE listed companies 

shows that while the employee cost has remained 

constant in the last one year, director 

compensation has shot up more than 

two times. “Automation, technology adoption 

are helping the companies maintain 

the headcount, but the total salary expense 

is still increasing because of the hikes given 

to senior leaders, in line with global trends,” 

says Raina of Hunt Partners. 

$1.5 mn 

Is the average pay 

of a CEO in India. 

It's $14.25 million 

in the US 

Amara Raja’s Galla for instance, earns 2,082 times 

the median salary of an employee in the company, while 

Airtel’s Mittal gets 366 times. Naik of L&T earns 1,101 

times that of an employee while at the tail end is Arvind 

Uppal, Chairman at Whirlpool, who earns 91 times. 

Does this mean that Indian CEOs are overpaid? A 

large majority of HR experts do agree that CEO remuneration 

structure is indeed going over the top. “What 

we really need is not to keep the top boss happy but also 

put in governance mechanisms to ensure there is no 

excessive risk involved for short term profitability gains,” 

says Gupta of Aon. “Compensation should be structured 

to promote innovation, sustainable institution building 

and value creation for all stakeholders of the firm and not 

just investors”. There is always a debate around a package 

offered to a CEO. This has gained momentum in the 

US especially after the 2008 economic crisis. However, 

as more Indian companies achieve global scale, professional 

CEOs have to be brought in to create value 

and they will have to be made a part of 

the value creation process. In fact, Indian 

CEOs still earn much lesser than their global 

counterparts. The average pay of a CEO 

in India is $1.5 million while in the US it is 

at $14.25 million, says a Bloomberg report. 

Sky-rocketing packages in the country are 

definitely here to stay. 

With data inputs from Niti Kiran; 

Additional reporting by Ajita Shashidhar 

@sonalkhetarpal7 


CEO SALARY 

TOP TEN PROFESSIONALS 

VALUE CREATORS 

Professional CEOs have been 

generously rewarded for creating 

enormous wealth for their companies. 

C.P. Gurnani 

MD & CEO, 

Tech Mahindra 

`150.70 crore (2016/17) 

` 45.36 crore (2015/16) 

RAISING A RACING CRAFT 

I DON'T BELIEVE this is a sinking ship. No longer. This may not be a 

racing craft yet. But it is our task to make it one,” remarked Anand Mahindra, 

Chairman of the Mahindra Group, at his first press conference 

in Hyderabad in 2009 after acquiring troubled IT giant Satyam Computer. 

The man tasked with the job was C.P. Gurnani, who rose to the 


occasion. His biggest contribution was taking 

over the scam-tainted Satyam, fixing 

its problems and successfully integrating 

it with Tech Mahindra. In a decade since 

they acquired Satyam, Gurnani grew the 

top line almost six times and profits four 

times. And he has been richly rewarded 

for his efforts. His salary was `2.4 crore 

in 2016/17 with perquisites of `10 lakh. 

Gurnani also encashed stock options worth 

`147 crore. On top of this, a commission 

(as a percentage of profit) of `98 lakh. His 

remuneration adds up to `150.7 crore. 

The company’s revenues were up 2.1 

per cent to `23,661.2 crore in 2017/18 and 

net profit surged 31.2 per cent to `3,999.3 

crore. Today, Tech Mahindra takes pride 

in saying that it clocks close to 25 per cent 

of its revenue from digital busines. The 

company says it is “on a critical journey of 

transformation from Information Transformation 

to Digital Transformation.” 

–E. Kumar Sharma 


2 

3 

ICONIC 

LEADER 

A.M. Naik 

Group Chairman, 

Larsen & Toubro 

`78.9 crore 

(2016/17) 

`66.14 crore 

(2015/16) 

ANIL MANIBHAI NAIK, 76, 

had joined engineering 

major Larsen &Toubro as 

a junior engineer in 1965 

and rose through the ranks 

to become CEO and MD in 

1999. In 2003, he became 

chairman and currently he 

has a non-executive role 

with the same rank, lending 

vision to and setting the 

agenda for the `1.2 lakh 

crore company. Naik has 

transformed the company 

into a global engineering & 

technology powerhouse. 

Naik was among the 

highest paid executives 

in India in 2016/17, netting 

about `78.91 crore. The 

company's annual report 

reveals that Naik was paid 

`38.04 crore as retirement 

benefits, which included encashment 

of accumulated 

past service leave of `32.21 

crore. Naik, who got a salary 

of `3.36 crore and `18.24 

crore from commissions, 

also got perquisites worth 

`19.27 crore, including stock 

options exercised during 

the year (`19.01 crore). 

Naik, who has pledged 

over 75 percent of his 

wealth to charity, had 

offloaded some of his 

shares in L&T, worth nearly 

`72 crore, in March 2014. 

Naik's net worth is estimated 

to be over `400 crore. 

–P.B. Jayakumar 

Aditya Puri 

MD & CEO, 

HDFC Bank 

` 67.5 crore (2016/17) 

` 31.5 crore (2015/16) 

SUPER PERFORMER 

ADITYA PURI, 67, must rank 

among the most successful CEOs 

globally. Over a career spanning 

over two decades with HDFC 

Bank, he has built an institution of 

size from scratch. Today, the bank 

boasts a total income of `95,461 

crore, profits of `17,486 crore, 

total assets of `11.03 lakh crore 

and market capitalisation of `5.32 

lakh crore. Its market cap exceeds 

that of all public sector banks put 

together. So, it isn’t surprising that 

Puri is amongst India’s highest paid 

executives. His remuneration for 

2016/17 stood at `67.5 crore. This 

includes perquisites and ESOPs. 

According to the bank’s annual 

report, Puri’s annual gross salary is 

Rs 10.05 crore while stock options 

amounted to `57.42 crore. 

HDFC Bank has the lowest 

NPAs and has no governance issues. 

Puri, set to retire in October 

2020, has laid the foundation for 

future growth. It would come 

from rural and semi-urban areas 

where the bank is setting up an 

extensive network. 

–Anand Adhikari 


CEO SALARY 


5Guenter Butschek 

MD & CEO, Tata Motors Ltd. 

` 22.55 crore (2016/17) 

` 5.04 crore (2015/16) 

Joined on February 15, 2016 

4 

Om Prakash 

Manchanda 

CEO, 

Dr Lal PathLabs 

` 33.2 crore 

(2016/17) 

`29.7 crore 

(2015/16) 

PRECISE 

DIAGNOSIS 

WHEN OM PRAKASH 

MANCHANDA joined 

Dr Lal PathLabs as its 

Chief Operating Officer 

in 2005, the pathology 

lab chain was making 

the journey from a family 

run entity to a corporate 

organisation. Manchanda’s 

twin challenge 

was to find professionals 

and automate the front 

end. His exposure to 

consumer product sales, 

distribution and marketing 

with Hindustan 

Unilever helped and Lal 

PathLabs soon became 

known for its customer 

PHOTOGRAPH BY REUBEN SINGH 

friendly offerings. Under 

Manchanda, Lal 

PathLabs has become 

India’s largest diagnostic 

company. In 2008, he 

became the CEO. Manchanda’s 

remuneration 

added up to `33.2 crore 

in 2016/17, with stock 

options amounting to 

`29.89 crore. 

Manchanda oversaw 

the IPO in 2015, making 

Lal PathLabs India’s first 

listed pathology company. 

He is steering the 

company’s international 

foray – it has just begun 

ground operations in 

Bangladesh and Nepal. 

Total revenue grew 15.8 

per cent to `1,057 crore in 

2017/18 while net profit 

rose 10.4 per cent to 

`171.8 crore. 

–Joe C. Mathew 

DRIVING UPHILL 

GUENTER BUTSCHEK is the 

highest paid CEO among Indian 

auto companies. In 2016/17, the 

first full fiscal year of Butschek 

with Tata Motors, his remuneration 

added up to `22.55 crore. 

Butschek, former chief operating 

officer at Airbus, joined 

when the company was making 

heavy losses and struggling to 

retain its market share in India. 

He focused on pruning costs 

and expanding sales but encountered 

rough weather. Demonetisation 

and new emission norms 

took a toll and the company 

posted a mammoth `2,480 

crore loss in 2016/17. The losses 

though have narrowed sharply in 

2017/18, at `1,035 crore, even as 

revenue jumped 21.4 per cent to 

`59, 625 crore. Butschek's basic 

salary was `2.42 crore in 2016/17 

but the benefits, perquisites and 

allowance were higher at `13.14 

crore. The company also paid 

him an incentive of `6.7 crore. 

–Nevin John

RIGHT MOVES 

6 

SAUGATA GUPTA 

MD & CEO, Marico Ltd. 

` 16.55 crore (2016/17) 

` 8.06 crore (2015/16) 

SAUGATA GUPTA, MD & CEO 

of the `6,322 crore Marico, 

is the highest paid CEO in 

the Indian FMCG sector. At 

`16.55 crore, his remuneration 

in 2016/17 was higher 

than that of the CEO of the 

`35,218 crore Hindustan 

Unilever. This included stock 

options worth `7.72 crore. 

Though Marico is synonymous 

with its founder, 

Harsh Mariwala, Gupta 

has been the force behind 

its growth for close to a 

decade. Under Gupta, the 

company has evolved into a 

hair care company from being 

just a coconut oil manufacturer. 

It recently ventured 

into male grooming too. It is 

also into premium edible oil 

and health foods under the 

Saffola brand. Almost all its 

brands, be it hair oils, edible 

oils or other value-added 

hair products, are market 

leaders in their categories. 

The company’s latest foray 

is Studio X, premium male 

grooming products that 

it plans to sell only through 

Amazon. 

Analysts say Marico will 

be an over `7,000 crore 

company by 2019. Marico reported 

standalone net profit 

of `718.2 crore for 2017/18 

as against `842.7 crore in 

2016/17. Total income was 

`5,398.5 crore as against 

`5,130.74 crore in 2016/17. 

The bulk of this growth 

came from rural markets. 

Marico, under Gupta, is 

surely making the right 

moves. 

–Ajita Shashidhar 

STRATEGIC THINKER 

WHEN A. MAHENDRAN QUIT as MD of Godrej Consumer 

Products in 2012, the then Chief Strategy Officer, Vivek 

Gambhir, was the obvious successor. The former Bain 

& Company partner had played a big role in guiding the 

company's international plans, overall group strategy and 

conducting portfolio analysis. Under Gambhir, the company 

has reported stable growth even when the economy 

hasn’t been doing well. In the last fiscal, it registered 6.8 

per cent growth at a time when most categories where 

it has brands (haircare, home insecticide etc) 

registered lacklustre growth. The 

company is expecting 10-12 per 

volume growth this financial 

year. Also on the cards are 10 

brand launches. Gambhir took 

home `15.95 crore in 2016/17, 

including `2.91 crore in the form 

of stock options. The CEO of a 

leading executive search firm 

says most Indian promoter-run 

companies are ready to invest in 

good professional CEOs to take 

their business to the next level. 

The company reported an 18 per 

cent rise in net profit for 2017/18 to 

`999.9 crore. 


7 

Vivek 

Gambhir 

MD & CEO, 

Godrej 

Consumer 

Products Ltd. 

` 15.95 crore 

(2016/17) 

` 19.62 crore 

(2015/16) 


CEO SALARY 


8 10 

Arvind 

Uppal 

Chairman & 

Executive 

Director, 

Whirlpool 

India 

` 15.34 crore 

(2016/17) 

` 9.99 crore 

(2015/16) 

TURNAROUND 

AGENT 

ARVIND UPPAL has transformed the Indian unit of the 

American consumer durable giant, from a struggling loss 

making entity to a profitable one, since he took charge in 

2005. “I had to focus on our strengths: our people, who 

were excellent, and our ability to focus on product innovation,” 

Uppal had told Business Today earlier. Uppal is the 

highest paid head honcho in the consumer durable sector 

with an annual remuneration of `15.34 crore. The largest 

chunk of his compensation in 2016/17 was ESOPs from 

Whirlpool Corporation, at `4.61 crore. His basic salary 

was `2 crore while bonus, allowances and perquisites 

made up the rest. After making Whirlpool a household 

name in refrigerators and air-conditioners, Uppal’s goal 

now is to achieve revenue of $1 billion (`6,800 crore) by 

2020. The company in the last one year has strengthened 

its presence in Tier II-III markets with a population of 

less than 50,000. The company’s net sales rose 14.41 per 

cent to `5072.55 crore in 2017/18 while net profit was up 

13 per cent to `350.67 crore. –Ajita Shashidhar 

Sanjiv Mehta 

MD & CEO, Hindustan 

Unilever Ltd. 

` 14.2 crore (2016/17) 

` 13.87 crore (2015/16) 

BRINGING 

CHANGE 

AN EYE ON 

GROWTH 

AL RAJWANI is the third highest 

paid Indian FMCG CEO, at 

`14.3 crore in 2016/17, after 

Marico's Saugata Gupta and 

Godrej Consumer's Vivek 

Gambhir. But while both Marico 

and Godrej have grown 

despite disruptions, such as 

demonetisation and GST, the 

Procter & Gamble Hygiene 

and Healthcare India growth 

story has been lacklustre. 

Rajwani took over as the CEO 

in 2015. A P&G old-timer, he 

had worked in the company's 

businesses in Canada, US 

and China. In the fiscal ended 

June 2017, sales were up 3 

per cent to `2,419 crore while 

profit after tax inched up 2 

per cent to `433 crore. In the 

fourth quarter of this fiscal, 

profits slipped 16 per cent 

even as sales remained flat. 

Profits have been hit by rising 

investments on product 

innovations and advertising 

to fuel growth. “Both the 

feminine care and health care 

businesses will continue to 

focus on growth,” says the 

company. –Ajita Shashidhar 

9 

AL RAJWANI 

MD, Procter & 

Gamble Hygiene 

& Healthcare 

` 14.30 crore 

(2016/17) 

` 8.97 crore 

(2015/16) 

SANJIV MEHTA, Chairman 

and CEO of the `35,218 crore 

Hindustan Unilever, is the 

force behind the company's 

robust growth story. In a year 

of economic uncertainties 

when most FMCG companies 

were under pressure, 

HUL registered 12 per cent 

growth. It reported 17 per 

cent growth in annual net 

profit to `5,237 crore for 

2017/18. Mehta, in a recent 

interview with Business 

Today, talked about his 4G 

mantra of growth. "We have 

a 4G mantra of growth -- 

consistent growth, profitable 

growth, competitive growth 

and responsible growth." 

With an annual remuneration 

of `14.2 crore, Mehta 

may not be the highest paid 

FMCG CEO, but he has surely 

brought HUL back on the 

growth track after quarters 

of lacklustre growth. 


Financials considered are standalone

CEO SALARY 

TOP TEN PROMOTERS 

PRUDENCE 

PAYS 

Indian promoters take home fat 

pay cheques but their compensation 

is, in most cases, linked to 

company performance. 

Kalanithi Maran 

Executive Chairman, 

Sun TV Network. 

`77.9 crore (2016/17) 

` 71.5 crore (2015/16) 

KING MARAN 

KALANITHI MARAN'S annual remuneration 

at `77.9 crore may seem a whopping 

amount but the fixed component (`13.14 

crore), like most business leaders, is a 

small fraction of that number. The variable 

component added up to a hefty `64.79 crore 

(ex-gratia/bonus) in 2016/17. 

Under Maran, Sun TV Network has 

posted robust earnings in recent years. It 

clocked a total income of `3,002.10 crore in 

the year ended March 31, 2018, a rise of 11 

per cent over the previous fiscal. The company’s 

bottom line expanded 11.6 per cent to 

`1093 crore in the same period. Sun takes 

pride in being “one of the largest television 

broadcasters in India operating satellite 

television channels in Tamil, Telugu, Kannada 

and Malayalam and FM radio stations 

across India.” Maran is focused on creating 

a lean cost structure for his network and 

shut down his loss-making Kannada news 

channel in 2017. He is also on the prowl for 

new opportunities and recently launched a 

Malayalam comedy channel, Surya Comedy. 

Maran’s 75 per cent stake entitles him 

to a massive dividend. A `10 dividend in 

2016/17 translated into `295 crore for the 

29.55 crore shares. 

–E. Kumar Sharma 


2 

Pawan Munjal 

Chairman 

MD & CEO, 

Hero MotoCorp 

` 59.7 crore (2016/17) 

` 57.4 crore (2015/16) 

IN TOP GEAR 

WHEN PAWAN MUN- 

JAL, 61, became the 

managing director of 

Hero Honda in 2002, 

the company was 

already the world’s 

largest two wheeler 

maker. His acid test 

came in 2010 when 

he parted ways with 

Honda Motor Corp. 

But Hero MotoCorp 

has held firm, exploiting 

the strength of its 

brands and distribution 

while building 

technical expertise. 

In 2015, Munjal 

also became the 

chairman, making 

him one of the highest 

paid CEOs in the 

country. His remuneration 

was `59.7 

crore in 2016/17. This 

included a commission 

of `45.64 crore, 

with basic salary and 

perquisites making up 

the rest. 

Munjal has 

envisioned Hero as 

a global player. The 

company began operations 

at its second 

factory outside India, 

in Bangladesh, in May 

2017. He has not lost 

focus on India – the 

company recently 

began construction of 

its eigth manufacturing 

unit in the country 

in Andhra Pradesh. 

It will take the company's 

overall production 

to over a crore 

units per annum. Total 

income grew 6.4 per 

cent to `33,398 crore 

in 2017/18 while net 

profits rose 9.5 per 

cent to `3,697.4 crore. 

To keep his nose 

ahead of competition, 

Munjal will have to 

dig into his wealth of 

experience. 

– Sumant Banerji 

3BEYOND 

RESEARCH 

Murali K. Divi 

Chairman & MD, 

Divis Laboratories 

`46.5 crore (2016/17) 

` 44.99 crore (2015/16) 

DESPITE THEIR DIFFER- 

ENCES, Kallam Anji Reddy, 

founder of Dr Reddy’s Laboratories, 

had praised Murali 

K. Divi’s chemistry skills and 

entrepreneurial zeal in his 

memoirs. Some 28 years 

after Divi broke away from 

Reddy to found Divis Laboratories, 

those who know 

him say he is leveraging 

both these strengths. He is 

the guiding force behind 

the company’s research 

planning and, evaluation of 

future products, apart from 

playing a role in contracting 

future business and 

customer engagements. 

Some of these are hard 

to quantify. In April 2017, 

for example, an import 

alert was imposed on its 

Visakhapatnam plant by the 

US Food and Drug Administration, 

denting profitability. 

But Divi ensured that remedial 

steps were taken and 

the issue was resolved by 

October. Divis posted total 

revenue of `3,949.71 crore 

in 2017/18, down 4.6 per 

cent over the previous fiscal, 

while net profit fell 17.43 

per cent to `869.58 crore. 

Divi’s remuneration is 

pegged to company performance. 

It has two components 

– a fixed annual 

income of `1 crore while the 

rest is 3 per cent of gross 

profit as commission, as per 

the contract. He got `46.5 

crore in 2016/17. The Companies 

Act specifies that 11 

per cent of profits can be 

given to directors as commission. 

Divi’s package rose 

3.27 per cent in fiscal 2017 

while median remuneration 

of employees went up 11 

per cent. 

–E. Kumar Sharma

CEO SALARY 


5H.M. Bangur 

MD, 

Shree Cement Ltd. 

4Onkar S. 

Kanwar 

Chairman & 

MD, 

Apollo Tyres 

` 45.7 crore 

(2016/17) 

`53.2 crore 

(2015/16) 

WHEELS 

OF SUCCESS 

WITH AN ANNUAL package 

of `45.7 crore in 

2016/17, Onkar Kanwar 

is fourth in the pecking 

order. In a career spanning 

over four decades, 

Kanwar, a Science and 

Administration graduate 

from the University of 

California, has lifted 

Apollo from a single 

plant Indian manufacturer 

of commercial 

vehicle (CV) tyres to 

a global entity with a 

full-fledged product 

portfolio, spanning 

three continents and six 

factories. 

Kanwar took home 

a salary of `4.8 crore in 

2016/17 and was also 

awarded a king's ransom 

as commission (`33.6 

crore). Perquisites added 

another `5.8 crore to 

his remuneration. With 

profits sliding on rising 

raw material costs, 

Kanwar's remuneration 

dipped in 2016/17. 

Kanwar now wants 

to make his presence 

felt globally. Apollo 

Tyres inaugurated its 

first greenfield facility 

outside India in Hungary 

last year. At the same 

time, OEMs like Volkswagen, 

Ford and SEAT 

became its clients. 

Total income rose 

6.1 per cent to `10,676.4 

crore in 2017/18 but 

profits slipped 23 per 

cent to `622.4 crore. 

Kanwar sets audacious 

targets to determine 

risk taking abilities 

and the commitment of 

his workforce. 

–Sumant Banerji 


THE FIGHTER 

HARI MOHAN BANGUR, 66, 

the Managing Director of 

Shree Cement, is the highest 

paid promoter in the cement 

sector. He took on mighty 

competitors such as the $44 

billion Aditya Birla group and 

the $26 billion Swiss cement 

giant LafargeHolcim to hold 

on its own and also fought 

economic sluggishness and 

construction slowdown. In 

2016/17, he drew a remuneration 

of `38.2 crore. The basic 

salary was `16.95 crore but 

commission was much higher 

at `20 crore. He also got a 

retirement benefit of `1.25 

crore. 

Bangur is credited with 

the rise of Shree Cement in 

the last 16 years. The cement 

maker, which was struggling 

to run its plant in Rajastan in 

2002, enhanced its capacity 

from just around 2 MT then to 

around 35 MT. In 2017/18, 

the company posted a 

revenue of `10,160 crore as 

against `9,497 crore in the 

previous year. –Nevin John 

` 38.2 crore (2016/17) 

` 25.3 crore (2015/16) 


6 

7 

THINKING 

LONG TERM 

Jayadev Galla 

Vice-Chairman 

and MD, Amara 

Raja Batteries. 

`38.1 crore 

(2016/17) 

`39.26 crore 

(2015/16) 

JAYADEV GALLA, Vice- 

Chairman and Managing 

Director at home-grown 

automotive and industrial 

battery maker Amara Raja 

Batteries, doesn't want to be 

a burden on his company. “I 

will make money when the 

company makes money,” 

he says. This, to him, is a fair 

approach for all promoterdirectors. 

“I take a long term 

view of my performance 

over multiple years though 

my pay is determined by the 

last one year performance.” 

His remuneration structure 

has been consistent 

right from the early 1990s. 

Galla's income is linked 

to the profitability of the 

company and is divided into 

two parts – salary of around 

`2 crore and the balance is 

commission (5 per cent of 

net profit), which in 2016/17 

was `36 crore. With the 

company's profits dipping 

in 2016/17, Galla’s package 

shrunk 3 per cent in the 

fiscal. Amara Raja's total 

income rose 4.5 per cent to 

`6,299.35 crore in 2017/18 

while net profit was down 

1.5 per cent at `471.32 crore. 

Galla's thrust is on the 

career development of 

employees and becoming 

globally competitive. The 

company commissioned its 

state of the art two-wheeler 

battery plant in Andhra 

Pradesh in 2017. 

The promoters and 

promoter group earned a 

dividend of `37.8 crore in 

2016/17. –E Kumar Sharma 

Arvind M. Poddar 

Chairman & 

Managing Director, 

Balkrishna 

Industries 

` 35.2 crore (2016/17) 

` 32.3 crore (2015/16) 

ON A TEAR 

BALKRISHNA INDUSTRIES 

is a perfect example of Make in 

India. The company gets more 

than 80 per cent of its revenues 

from exports. Its history dates 

back to the mid-50s when founder 

chairman Mahabir Prasad Poddar 

began manufacturing cycle tyres. 

Balkrishna expanded to two and 

three wheeler tyres in the 80s and 

off-highway tyres in the mid-90s, 

entering the radial agriculture tyres 

segment in 2004. Arvind Poddar, 

son of the founder, took over the 

reins in 2006 as vice-chairman 

& managing director and was 

anointed the chairman & managing 

director in 2012. The focus on offhighway 

tyres strengthened under 

Arvind's leadership. Profits more 

than doubled in five years – surging 

from `355 crore to `716 crore 

between 2012/13 and 2016/17. 

Net profit stood at `739 crore on 

total income of `4,783.5 crore in 

2017/18. Arvind's annual remuneration 

was `35.29 crore in 2016/17 – 

about `30 crore was commission. 

Over five years it has gone up 211 

per cent. –Anand Adhikari 

54I BUSINESS TODAY I July 15 I 2018

CEO SALARY 


8 

WITH 

Sanjay 

Agarwal 

MD & CEO 

AU Small 

Finance Bank 

` 32.5 crore 

(2016/17) 

NA 

(2015/16) 

BANKING ON 

THE UNBANKED 

A `32.50 CRORE annual 

remuneration in 2016/17, 

Sanjay Agarwal, 47, will make 

successful, high profile 

bankers appear poorly paid. 

A first generation entrepreneur, 

Agarwal runs the AU 

Small Finance Bank that 

serves under-banked and 

unbanked customers in rural 

and semi-urban areas. The 

rise in Agarwal’s package 

was a mind numbing 906 

per cent in 2016/17. 

Agarwal had a two 

decade track record of 

running a successful non 

banking finance company , 

AU Financiers. It became a 

small finance bank in 2017. 

The bank made a smashing 

capital market debut last 

July and has a valuation of 

close to `20,000 crore. 

Agarwal’s market wealth is 

about `4,000 crore. 

The bank has grown exponentially. 

Revenues grew 

at a CAGR of 40 per cent 

over five years till 2016/17 

while profits surged 75 per 

cent. In 2017/18, it had a total 

income of `2,155 crore and 

net profit of `292 crore. 

The annual report says 

that the compensation for 

2016/17 has been inclusive 

of bonus for the previous 

year. Without the bonus, the 

rise would have been only 25 

per cent, it says. 

–Anand Adhikari 

10 

S.P. Oswal 

Chairperson & 

Managing Director 

Vardhman Textiles Ltd. 

`26.7 crore (2016/17) 

`18.30 crore (2015/16) 

THE RICH 

YARN 

INTO THE HEADWIND 

FOR THE SECOND YEAR running, Sunil Bharti Mittal, 60, has 

retained the ninth position in our roster of India’s highest paid promoter 

CEOs. The Chairperson of Bharti Airtel pocketed `30.1 crore 

in 2016/17, an 8 per cent increase over 2015/16. 

It has been tough going for Mittal since Mukesh Ambaniowned 

Reliance Jio launched 4G mobile services in September 

2016. Jio queered the pitch by offering services – both voice and 

data – free for the first few months. Even as Mittal battled adversity, 

his salary rose to `26.98 crore in 2016/17 (up from 

`24.62 crore in the previous fiscal) while perquisites 

remained unchanged at `1 crore. 

Airtel posted a net profit of `79.2 crore in 

2017/18 from a loss of `9,925.6 crore in the 

previous fiscal while its total revenue was down 

13.7 per cent to `53,898.6 crore. Still, Mittal 

has the first mover advantage. Airtel’s revenue 

market share, at 32 per cent, is well ahead 

of others. 

The coming year will be 

the litmus test for Mittal. 

–Anup Jayaram 

9 

Sunil Mittal 

Chairman, 

Bharti Airtel 

` 30.1 crore 

(2016/17) 

`27.85 crore 

(2015/16) 

S.P. OSWAL, Chairman and 

Managing Director of India's 

largest yarn manufacturer 

and leading cotton yarn 

exporter, Vardhman Textiles 

Ltd, was among the top ten 

highest paid executives in 

2016/17. He netted about 

`26.7 crore, which included 

`25.87 crore as share of profits 

made during the year. 

The PAT for 2016/17 rose 

48 per cent to `1,000 crore. 

While most textile companies 

found it tough to survive 

during the year, Vardhman 

Textiles managed to increase 

revenues by 2.04 per cent 

to `5728 crore, thanks to 

increased domestic sales, 

new product launches, 

shift to more value-added 

products and expanded 

global footprint. In the last 

five years, the company has 

invested over `2,000 crore 

to modernise factories and 

start new facilities. 

–P.B. Jayakumar 

Financials considered are 

standalone

CEO SALARY 

COLUMN 

THE EMERGENCE 

OF THE POWER LAW 

Performance distribution does not follow the 

normal curve — fewer people contribute far 

more to overall performance 

By Anandorup Ghose 

Vilfredo Pareto, after whom 

the Pareto principle was 

named, ran hundreds of social 

experiments; and one of his 

findings eventually gave us 

the eponymous principle that 80 per 

cent of all land in Italy was held by 

20 per cent of people. Over the last 

120-odd years since Pareto published 

his findings, this logic has been visible 

in almost every field. 

Another century before Pareto’s 

findings, French scholar Marquis de 

Laplace defined the normal distribution 

curve. The world of people 

management and HR chose to go 

with statistics over sociology. 

Gradually, and perhaps a little 

unknowingly, direction has been 

changing over the last few years and 

there is increased appreciation for 

the fact that employee performance 

does not necessarily follow a normal 

distribution. In 2012, two professors, 

Ernest O’Boyle and Herman Aguinis, 

suggested that human performance 

is not normally distributed and 

there is greater prevalence of “star 

performers” who are able to deliver 

far more than would be normally 

anticipated. They postulated that 

performance distribution does not 

follow the normal curve but a Power 

Law curve — where their data suggested 

that fewer people contributed 

far more to overall performance. 

On similar lines, Google in 2006 

famously launched its “pay unfairly” 

HR strategy where they essentially 

said, “At Google, we ... have situations 

where two people doing the 

same work can have a hundred times 

difference in their impact, and in 

their rewards.” 

This idea seems to have hit India 

now, and there seems to be a distinct 

shift companies’ approach to how 

they recognise and reward high 

performers. 

Data from 2001 shows that 

Indian companies placed about 55 

per cent of total employee population 

in the top two performance ratings. 

While performance distribution was 

extremely liberal, pay differentiation 

was not stark – the best got about 1.5 

to 1.6 times the average pay increase 

(i.e. if the average performer got 10 

per cent increase the top performer 

got 15-16 per cent increase). 

This liberal performance differentiation 

and moderate pay differentiation 

continued until the global 

financial crisis of 2008/09. In the 

post crisis scenario, top management 

pay continued increasing aggressively 

but the structure shifted from fixed 

pay increases to incentive-driven 

compensation. 

With companies becoming aware 

|of performance-based differentiation, 

the performance curve became 

sharper with far fewer people in the 

top rating boxes (the 55 per cent 

population in those boxes dropped 

to about 30 per cent). Gradually, 

top performers started taking away 

increasingly disproportionate part of 

the pay budgets (1.9 to 2.2 times the 

average). 

This year’s data suggests that 

the top 7 per cent of employees took 

close to 16 per cent of the overall 

compensation increase budget for 

the year while the medium performing 

employees (about 55 per cent) 

had to manage with less than half the 

total increase. 

We have to accept two fundamental 

shifts – firstly the world of 

mass production and manufacturing 

driven organisations where the 

process was more important than 

the person has given way to a far 

more services-driven world where 

individuals are more critical to the 

system and therefore the expression 

of Pareto principle will become 

gradually more important. 

Parallelly the other shift has been 

in the fact that the age of large pay 

increase budgets is gone and therefore 

as budgets become smaller (and 

inflation remains within control) 

companies will keep focusing on 

allocating larger and larger pools 

to more critical talent that actually 

drives the business. 

As the normal distribution curve 

dies its natural death, it is the age of 

the power law. 

The writer is 

Partner - Talent & Rewards 

at Aon Consulting India 


CEO SALARY 

ESOPs 

GAINING 

CURRENCY 

Companies of all hues, including 

old warhorses, are now betting 

on stock options to ensure 

employee loyalty 

By P.B. Jayakumar 

Illustrations by Nilanjan Das 

HYAM KUMAR SINGH lived in a singleroom 

tenement in Mumbai when life 

took a turn that seemed to be straight 

out of a Bollywood script, and he struck 

it rich. A poor migrant from Uttar 

Pradesh, Singh was an office boy, and 

the first employee of CitrusPay, which 

began operations in 2011. 

In September 2016, he got a windfall 

payment of `50 lakh, when South 

African online payments company 

PayU acquired CitrusPay for `860 

crore. Singh’s returns on his Employee 

Stock Option Plan (ESOP) were part 

of the `43 crore paid to 50 employees 

who cashed in their stock option compensation. 

At least 15 employees were 

rewarded with over `1 crore each. 

In January this year, Paytm sold 

shares to Canada-based VC firm Discovery 

Capital in a secondary sale, valuing 

the firm at $10 billion. That deal 

helped some 300 former and existing 

Paytm employees become millionaires. 

About 20-25 people reportedly made 

over $1 million each (about `6-7 crore) 

from the deal. If the recently announced 

$16 billion acquisition of online retailer

CEO SALARY 

ESOPs 

Flipkart by US retail giant Walmart 

sails through, present and previous 

Flipkart employees are set to benefit by 

at least $500 million by exercising their 

ESOP options. A year ago, Flipkart 

had repurchased ESOPs worth $100 

million from over 3,000 present and 

past employees, including Myntra and 

Jabong. 

The charm of ESOPs is back after 

a lull of 3-4 years and employees are 

showing renewed interest in ESOPs. 

If ESOPs were an option for most IT 

firms and to some extent in sectors like 

pharma, FMCG or banking to retain 

key talent, now ESOPs have become the 

main option for companies across sectors 

– from new generation e-commerce 

and technology based companies like 

cab aggregators to insurance companies 

that are struggling to get adequate cash 

liquidity in business - to attract talent, 

loyalty and retention, say experts. 

“Though exact data on companies 

and value of ESOPs on offer is not available, 

our estimate is that around 700 

listed and over 3,000 unlisted companies 

have offered equity-based compensation 

in some form,” says Harshu 

Ghate, Co-Founder and Managing 

Director, ESOP Direct, which specialises 

in equity compensation services. 

Partial or complete implementation 

of ESOPs has been achieved by 97 

per cent of 120 companies surveyed 

by ESOP Direct in 2017. The survey 

covered both listed and unlisted entities 

and almost 89 per cent of these companies 

said ESOPs were the best lure for 

talent. 

Retention and reward continue 

to be the topmost reason for granting 

ESOPs, followed by employee ownership. 

Overall, 62 per cent of companies 

rate wealth creation as a key objective 

for implementing ESOP plans. 

“ESOP is still one of the most attractive 

options to retain talent and ensure 

loyalty, especially for companies that 

are in a growing phase but lack liquidity 

in business and cannot afford to offer 

competitive packages to attract talent 

across sectors and businesses,” 

says Ishita Sengupta, Partner, 

Global Mobility Services, PricewaterhouseCoopers 

(PwC). 

Today’s managers are selective. 

DANGLING 

THE ESOP 

CARROT 

Parameters for 

selection of 

employees for equity 

compensation 

Past association/ 

Loyalty 

Past 

performance 

Current designation/ 

Responsibilities 

Future 

potential 

Others 

Source: ESOP Direct 

17% 

27% 

31% 

Gone are the days when ESOPs were 

generously offered to all employees. 

About 67 per cent companies surveyed 

by ESOP Direct said they granted 

ESOPs to less than 10 per cent of 

employees. Only 17 per cent companies 

said they gave ESOPs to over half of 

their employees. And 74 per cent 

companies gave ESOPs to all CXO level 

employees. 

“E-commerce companies are still 

liberal, offering ESOPs across levels, 

though they are now cautious and offering 

these only for critical functions such 

as analytics, technology, finance”, says 

K Sudarshan, MD, EMA Partners, an 

executive search firm. 

“In the last five years, our survey 

shows a clear trend for covering fewer 

employees. 67 per cent of companies 

(2015: 61 per cent) now grant ESOPs to 

24% 

1% 

Listed 

1% 

24% 

29% 

Unlisted 

24% 

22% 

less than 10 per cent of their employees, 

up from 50 per cent in 2011, whereas 

only 24 per cent (2015: 23 per cent) of 

the companies grant to more than 20 

per cent of the employees, down from 

36 per cent in 2011”, elaborates ESOP 

Direct’s Harshu Ghate. 

Until 2015, employee ownership, 

and retention were the key drivers for 

implementing ESOPs in an unlisted 

company. Similar to listed companies, 

reward and retention are the key drivers 

for implementing an ESOP plan even 

at unlisted companies. While companies 

with 50-200 employees give 

more weightage to reward and wealth 

creation as objectives for ESOPs, larger 

companies (over 1,000 employees) 

offer ESOPs mainly for retaining and 

rewarding well performing employees. 

Employees are also keen to know more 


and are interested in ESOPs these days. 

The situation was different a few 

years ago, when economic slowdown 

was dragging down valuations of 

unlisted firms and stock markets and 

employees were sceptical towards 

fortunes from ESOPs. 

In recent years, ESOP plans and 

options are again being explored by 

managements. However, the plans 

need to be well explained to employees 

by managements in a transparent manner 

with clear-cut exit options, vesting 

conditions and exercising schedules , 

says PwC’s Ishita Sengupta. 

ESOP Direct’s survey shows 62 per 

cent of companies have a vesting period 

of 3 to 4 years and annual vesting is the 

preferred frequency opted by most of 

the companies. (Vesting period is the 

time before shares in an employee stock 

option plan or benefits in a retirement 

plan are unconditionally owned by an 

employee. In most cases, if that person's 

employment terminates before the 

end of the vesting period, the company 

can buy back the shares at the original 

price). Listed companies prefer a 

shorter exercise period of up to four 

years, say experts. 

ESOPs can be of varied types and 

forms – like Employee Stock Purchase 

Scheme (ESPS), Restricted Stocks 

Units (RSUs), Performance Shares, 

Stock Appreciation Rights (SAR) 

including Phantom Stocks or ‘Shadow 

Stocks’. The advantage of Phantom 

Stocks, which are not real stocks, is that 

it can be redeemed into cash as per the 

scheme, without affecting the company’s 

share capital or voting percentages. 

Nowadays, employees are well 

informed, they know their rights, tax 

liability and exit options. Most employees 

now realise their ESOP valuations 

are notional until the start up goes for 

an IPO or share sale to PE/VCs or the 

company is really performing well to lift 

stocks in share market. 

“While the management has a 

choice to devise an equity plan best 

suited for the employees which meets 

its own objectives, unlisted companies 

need to comply with the provisions of 

the Companies Act 2013 with respect 

to ESOPs, and listed companies need to 

comply with detailed Sebi regulations 

“OUR ESTIMATE IS AROUND 700 

LISTED AND OVER 3,000 UNLISTED 

COMPANIES OFFER ESOPs” 

Harshu Ghate 

Co-founder and MD, 

ESOP Direct 

“THE ESOP IS STILL THE MOST 

ATTRACTIVE OPTION TO BE 

OFFERED BY COMPANIES THAT 

LACK LIQUIDITY” 

Ishita Sengupta 

Partner (Global Mobility 

Services), PwC 

in this regard. Compliance with the 

Foreign Exchange Management Act, 

1999 is also required to be ensured in 

case shares of a foreign parent company 

are allotted to employees of Indian 

subsidiary or shares of Indian company 

are allotted to employees who are based 

outside of India,” says Shalini Jain, Tax 

Partner, People Advisory Services, EY 

India. 

Experts point out that there were lot 

of grey areas earlier as observed when 

the Ibibo group took over bus ticketing 

firm RedBus, three years ago. A 

controversy had erupted following the 

acquisition, as even top-level managers 

claimed to have not benefitted from the 

deal. 

Over the last four years, a new trend 

is emerging among both listed and 

unlisted companies. Companies are 

moving from performance-based vesting 

to time based vesting, mainly due 

to market factors and the intense PE/ 

VC valuations. “This is quite a variation 

from global trends where companies 

are increasingly granting what is called 

performance units or performance 

awards. According to recent trends in 

the US, 82 per cent of the companies 

require satisfaction of performance 

conditions for vesting of awards,” says 

Harshu Ghate. 

Even traditional companies that 

are struggling at present are seriously 

looking at ESOPs as an option to retain 

talent. Tata Motors is one among 

them and will soon hand over a small 

shareholding to employees, in a first in 

the history of large companies under the 

Tata Group. Reportedly, Air India is also 

planning to offer ESOPs to retain its key 

employees, if a new suitor acquires the 

ailing government owned airline. 

EY’s Shalini Jain says that even 

conservative family owned manufacturing 

companies are nowadays looking at 

ESOPs as an option to 

bring professional talent and to 

retain key employees. 

“If you look at senior management 

compensations of traditional established 

companies, stocks are a huge 

component and fixed salary is comparatively 

less. If a CEO’s salary is `15 crore 

per annum, the fixed component would 

barely be `2-3 crore while the rest is 

largely stocks and other variables”, notes 

Sudarshan of EMA Partners. 

As listed companies grow each 

quarter and India’s start-up success 

stories unfold one after another, the 

ESOPs rags to riches stories are also 

everywhere, churning out numerous 

young millionaires. 

With inputs from Ajita Shashidhar 

@pb_pbjayan 


CEO SALARY 

E-COMMERCE 

CAUTION 

RULES 


are now more conscious 

than ever about 

employee benefits. 

By K.T.P. Radhika 

Illustrations by Raj Verma 

W 

hen the Walmart-Flipkart deal was announced in May, 

there was talk of how it would make 3,000-odd current and 

former employees of Flipkart millionaires. These employees 

– mostly from the Flipkart team of 2009 – had been given 

stock options as part of the compensation package. Founder 

Binny Bansal announced 100 per cent buyback of employee 

stock options (ESOPs) at the employee town-hall after the 

deal. The privileged list included Ananth Narayan, CEO of 

Myntra and Jabong; Mekin Maheshwari, former HR Head; 

and Sameer Nigam, Founder and CEO of PhonePe, the payment 

arm of Flipkart. 

However, the real rags-to-riches story was that of Ambur 

Iyyapa, the first employee of Flipkart. Iyyapa, who had joined 

as a logistics manager (currently, Associate Director, Customer 

Experience Management) at `8,000 a month was also offered 

ESOPs. His net worth now is a neat $1 million. 

The dream run of Flipkart employees, especially Iyyapa 

– who started off as a courier delivery boy — has revived

CEO SALARY 

E-COMMERCE 

among B-school graduates the romance of working in 

e-commerce companies. In early 2014, e-commerce 

companies got Day 1 slots on leading B-school campuses. 

Being part of an e-commerce company’s growth story was 

the obvious choice of job seekers and traditional favourites 

such as Unilever, Nestle and private banks were out. The 

reason was the wealth-creation proposition – in the form 

of ESOPs – that even the smallest of e-commerce startups 

offered to entry-level candidates. The fad ebbed by 

mid-2016 when many e-commerce companies were cash 

strapped as investors refused to fund them any longer. 

Sunil Goel, MD of executive hiring firm, GlobalHunt, 

says e-commerce salaries dipped in 2016/17 when many 

enterprises shut shop. “Most companies who struggled 

had founder CEOs. Some took pay cuts to focus on reviving 

the business.” That’s when there was a reverse trend 

from e-commerce back to traditional companies, says 

Utpal Das, Client Director at executive search firm EMA- 

Partners. 

Salary Structure 

Nearly 30 per cent of CEO compensation is fixed pay, 

while the rest is bonuses and equity rewards. Typically, 

CEO compensation is determined by 3 Ps — pay for 

position, pay for person and pay for performance. “While 

there exists a well-defined pay for position in established 

industries, in e-commerce, given the industry dynamics, 

pay for person and pay for performance factors are seen 

as more relevant,” says Debasmita Das, Principal India 

Hitech Industry Lead at global consulting firm Mercer. 

For a hired CEO, the compensation will be a mix 

of fixed income, performance-oriented bonus and 

ESOPs, says Ambareesh Murty, Founder and CEO, 

Pepperfry. “However, for founder CEOs, while s/he has 

fixed income and performance-oriented incentives, the 

percentage of ownership is high and determines wealth 

creation,” says Murthy, who was country manager at 

Ebay before setting up Pepperfry. 

Deepti Varma, Director HR, Amazon, says Amazon’s 

compensation philosophy and strategy are built on 

the foundation of leadership principles, one of which is 

Ownership. “Leaders are owners. They think long-term. 

We reinforce this commitment to ownership through the 

structure of our compensation programme. Our goal is to 

attract, motivate and retain the high caliber employees.” 

Another trend is the larger share of long-term incentives 

(LTIs). “The pay mix will have more variability with 

LTIs having a larger share in total compensation,” says 

Das of Mercer. “The personal competence of the CEO 

determines base compensation. This includes taking an 

idea off the ground, getting funding, scaling up and running 

a profitable business.” An aggressive LTI serves the 

dual purpose of rewarding for performance and driving 

wealth creation, says Das. 

“LEADERS THINK LONG- 

TERM. WE REINFORCE 

THIS OWNERSHIP THROUGH 

THE STRUCTURE OF OUR 

COMPENSATION” 

Deepti Varma, 

Director HR, Amazon India 

According to Anuradha Parthasarathy, founder of 

California-based executive hiring firm AnuPartha, equities 

are helping companies hold on to CEOs. “Earlier, even 

big retail chains could not hold their top guys,” she says. 

For a start-up in which the majority of work is done by 

co-founders themselves, sweat equity sounds pragmatic. 

The ‘ownership for play’ model is said to be working well 

in the early stages. “Equities are one of the biggest hope of 

e-commerce CEOs,” says Ashish Goel, Founder-CEO of 

Urban Ladder. Says Vishwavijay Singh, Co-Founder and 

CEO of Ahmedabad-based e-commerce company Salebhai.com: 

“Flipkart has proved that if you are in the right 

company in the e-commerce space, it is a very good way of 

creating wealth in future.” The company recently filed for 

an IPO with BSE's SME platform. 

Cautious Hiring 

However, stories such as that of Iyyapa are far and few 

today. E-commerce companies are not giving blanket 

ESOPs to all staff members. Neither are fixed salaries 

of employees, including CEOs, unimaginably high. The 

salary of a CEO of an e-commerce company, says N. 

Shivakumar, Business Head, TeamLease Services, can 

be anywhere between `1.5 crore and `3 crore (excluding 


“FOR FOUNDER CEOs, 

THE PERCENTAGE OF 

OWNERSHIP IS HIGH 

AND DETERMINES 

WEALTH CREATION” 

Ambareesh Murty, 

Founder and CEO, PepperFry 

ESOPs and other variables) even for a mid-sized company. 

This is by no means small, but e-commerce CEO 

salaries during the boom were in the region of `6-7 crore. 

HR experts say are still doling out stock options to CEOs 

and senior management on the basis of the valuation of 

the company. 

However, when it comes to mid-management, e- 

commerce companies are far more cautious than before. 

Today, they offer ESOPs to only those who are in critical 

functions such as analytics or technology. HR, legal and 

finance, too, command a premium. T. Murlidharan, 

Chairman, TMI Group, expects further 

consolidation and expects manpower 

demand to be restricted to the top one 

or two players in each category. “The top 

SALARY TRENDS 


have regained their 

position as leading employers 

after over a year. 

However, they are 

cautious about hiring 

and compensation. 

The average salary of an 

e-commerce CEO is in 

the range of `2-3 crore, 

apart from ESOPs, 

unlike earlier when 

salaries were in the 

`5-6 crore bracket. 

Companies are giving 

out ESOPs to the middle 

management but only to 

those who are handling 

critical functions. 

players will get funded and they will pay 

whatever it takes to acquire or retain talent 

at the top. So, the offer and demand 

would be company specific and at senior 

levels for critical talent estimates are that 

it could range from anywhere between 

`70 lakh and `2 crore.” 

Murlidharan’s reading is that e-commerce 

companies will be conservative 

in offers for managerial talent. “The top 

players in each category will see aggressive 

funding. This will lead to aggressive 

positioning, leading to a wipe-out of the 

bottom players. The managerial team 

from the bottom players will be available. 

So, fresh hiring will be restricted to 

top two or three players.” 

S. Raghunath, Professor, Corporate 

Strategy, Indian Institute of Management, 

Bangalore, says, “The growth in 

online fashion, food and groceries will 

continue and niche e-commerce sites 

will surface in such categories. Therefore, 

jobs linked to these sites will continue 

to expand and grow as brick and mortar businesses 

seamlessly begin to link with their online presence.” 

E-commerce majors may be back on the priority list 

of B-school graduates seeking jobs but companies have 

become far more choosy. Siddharth Arora, an alumnus 

of Indian School of Business (ISB), joined a leading 

e-commerce market place after passing out in 2014. He 

claims that almost every third person from his batch 

was hired by an e-commerce company, but that isn’t the 

case any longer. “Companies are more selective today but 

even then the right people are still able to find the roles 

they are looking for.” Arora claims that 

while the entry-level salary for a MBA 

continues to be around `35 lakh, the 

number of candidates getting hired has 

certainly been rationalised. 

“There was a peak of inflated expectations 

in 2012/14, followed by a drop. 

However, now I think we are ascending 

the slope of enlightenment and will 

soon reach the plateau of productivity 

in next couple of years. The entry of the 

big retail giant like Walmart is evidence 

of the fact that the market has become 

more mature,” says Abbasali Gabula, 

Associate Director, External Relations at 

SPJIMR 

A recent report by Morgan Stanley 

forecasts that India’s e-commerce market 

will grow at a CAGR of 30 per cent 

to reach $200 billion by 2026. But there 

is certainly a lot more caution being 

exercised by e-commerce companies 

in terms of the kind of people they hire 

and also the kind of compensation packages 

they offer. 

The writer is a frelance journalist 

based in Chennai 


CEO SALARY 

COLUMN 

Debanik 

Basu 

Amit 

Tandon 

GREATER 

DETAILING NEEDED 

What needs to change in Indian CEOs’ 

compensation structure. 

By Debanik Basu and Amit Tandon 

Unlike Potter Stewart who 

said, I can’t define pornography, 

but I know it when I see 

it, the answer to ‘how much 

is too much’ continues to 

elude most boardrooms. What else 

can explain why the top 10 Indian 

CEOs were cumulatively paid `520 

crore in FY2016/17. And why, in 

the last five years, CEO pay in the 

top 500 companies has risen 85 per 

cent while revenues and profits have 

grown in the 40-50 per cent range. 

The payouts have been startling, 

given that no other number 

is as closely scrutinised and discussed 

as CEO pay. Regulators have 

tried to address this by asking for 

more disclosures and by imposing 

profitability-related thresholds. But 

the lack of an overarching framework 

leads to excessive pay packages – 

thus explaining why compensation 

continues to draw the ire of investors 

and other stakeholders. 

In part, this can be attributed to 

the innate complexity of the issue. It 

requires a fine balance between multiple, 

and often competing, factors – 

quantum, size, growth, peer benchmarks 

and company performance 

are just some of them. Navigating 

through these data points to arrive at 

an optimal pay level can be quite taxing, 

especially when clubbed with the 

concomitant goals of talent attraction 

and retention. For boards, a more germane 

approach would, therefore, be 

to increase its focus on the pay structure, 

rather than the final number. 

Generally, pay structures comprise 

‘fixed’ and ‘variable’ components. The 

variable part is linked to the performance 

of the individual (ability to 

meet revenue, volume or market share 

targets) or the company (profits, margins, 

market cap). On occasions, these 

may be supplemented with qualitative 

factors (leadership and engagement 

with stakeholders). 

Fundamentally, higher variable pay 

helps align the interests of the CEO 

with that of the company. It is taken 

to an extreme in the US where, as per 

an Equilar study, the fixed component 

in the S&P 500 companies constitutes 

only 12.3 per cent of overall pay with 

the remainder being in the form of a 

cash bonus, stock and ESOPs. 

In contrast, CEOs in India are 

paid almost 70 per cent as fixed pay. 

Also, very few have a long-term incentive 

(LTI) plan embedded in their pay 

structure – only 38 CEOs in the top 

500 companies were paid ESOPs/ 

RSUs in FY2016/17. It may not be 

an issue for promoter-run companies 

where the equity stake fosters a longterm 

view, but the lack of LTIs within 

a professional leadership runs the risk 

of creating and promoting an ephemeral 

view on the company’s strategy. 

From investors’ perspective, there 

is an added dilemma as they are often 

called upon to vote on compensation 

structures that are ambiguous 

and carry few meaningful details on 

commission, performance metrics 

and the quantum of LTIs – effectively 

conferring on the boards with 

unrestricted discretionary powers in 

setting the final pay. 

The practice is unlike most other 

markets. Over the past few weeks, 

Nikesh Arora’s headline pay of $126 

million has been in the news. However, 

a closer look at his terms of employment 

gives us a detailed breakdown. 

He will receive $1 million as salary 

and $1 million as a discretionary cash 

bonus. The bulk of his compensation 

is to be drawn from stock options, to 

be granted in a phased manner if he 

meets defined stock price targets. 

In India, there have already been 

isolated cases of discontent regarding 

executive compensation. With 

the rise in institutional ownership, 

scrutiny will only increase. It implies 

boards need to be more proactive 

and devise compensation arrangements 

with well-defined performance 

metrics, which will help stakeholders 

understand payouts. The granularity 

of disclosures will also act as a selfregulatory 

tool by reigning in discretionary 

powers of compensation committees 

and make the pay structures 

more transparent, equitable and 

aligned to performance. 

Debanik Basu is Group Head and 

Amit Tandon is MD at Institutional 

Investor Advisory Services India 


CEO SALARY 

HIGH-PROFILE EXITS 

CALLING IT 

Y.C Deveshwar 

It is Deveshwar’s 50th year at ITC. 

Under him, ITC became a fast moving consumer goods giant from being a tobacco company 

He groomed the next incumbent, Sanjiv Puri, who is in full charge 

Remuneration in 2016/17: 

21.17 cr

A DAY 

Y.C. 

Deveshwar at ITC and 

A.M. Naik at L&T have built 

a legacy any corporate 

leader would be proud of. 

Then there are others whose 

initiatives are still in the 

process of bearing fruit. 

By E. Kumar Sharma 

Photograph by Shekhar Ghosh 

& Rachit Goswami 

A.M. Naik 

Naik is in his 53rd year at L&T 

When Naik took over, L&T was a `5,000 crore company; it is now an over `1,20,000 crore engineering conglomerate 

He groomed the next incumbent, S.N. Subrahmanyan, and involved them in strategy building 


78.91 cr* 

*Includes stock options exercised

A 

NYONE WHO HAS MET BOTH Y.C. DEVESHWAR, synonymous 

with ITC, and Sanjiv Puri, the new MD & CEO, 

knows that they are strikingly different – physically that is. 

And as Puri takes the mantle from Deveshwar, to expect 

him to slide effortlessly into his mentor’s giant shoes may be 

unfair. But, thanks to some early thinking by Deveshwar, it 

may not be very difficult either. Deveshwar has, for the past 

few years, been involving Puri closely in strategy making 

and grooming him for February 5, 2017, the day Deveshwar, 

then 70, quit the executive leadership role and Puri took 

over as the CEO (he was re-designated as Managing Director 

effective May 16, 2018). For Deveshwar, who joined ITC 

in 1968 and has over the 21 years that he has been at the 

helm turned this tobacco company into an FMCG giant, 

passing the baton successfully to Puri might count among 

his biggest successes. 

And this is exactly what he, an alumnus of Indian Institute 

of Technology, Delhi, and Harvard Business School, 

who led Air India as Chairman and Managing Director between 

1991 and 1994, shares with another icon of corporate 

India — A.M. Naik — who took L&T from a `5,000 crore 

company in 1999 to an over `1,20,000 crore engineering 

conglomerate. Naik, too, has been able to successfully pass 

on the baton to S.N. Subrahmanyan after spending years 

grooming him for the top role. 

Beyond Tobacco 

Both have had an impact that is spread over decades. For instance, 

a lot of businesses ITC incubated under Deveshwar 

now have the size and scale to be on their own. Aashirvaad 

Atta, for example, has made ITC the second-largest wheat 

PHOTOGRAPH BY RACHIT GOSWAMI 

Vishal Sikka 

Sikka made Infosys adopt disruptive technologies 

such as artificial intelligence and automation. He 

also built a strong top team by hiring outsiders. 

Under him, Infosys went for a series of acquisitions. 

It also picked up stakes in three start-ups. 


16.01 cr 


CEO SALARY 


buyer in the country after Food Corporation of India; it 

buys nearly two million tonnes of wheat every year. Or the 

manifold increase in plantations under the paperboard 

division. By thinking beyond tobacco, Deveshwar ensured 

that the company does not miss the opportunities 

the FMCG sector offers in India. The driving force behind 

ITC’s FMCG initiatives is a science and technology centre 

where over 350 scientists focus on creating products 

for new-age lifestyle, especially in the health and wellness 

space. Some of ITC’s most successful products have been 

born at the centre - Aashirvaad sugar control release Atta; 

digestive biscuits made of 100 per cent Atta with no artificial 

sweetener, maida and sugar; and even juice made 

from real fruit rather than fruit pulp. This is apart from 

the sleep menus and alert foods that its hotels offer to their 

customers. 

The tangible impact of these efforts 

can be seen in quarterly and yearly 

growth numbers but beyond that it 

is the strategic part, the vision, which 

made both Deveshwar and Naik take 

calibrated risks and anticipate customer 

reaction and competitor response. In 

2016/17, Deveshwar took home `21.17 

crore (including leave encashment on 

retirement) and Naik `78.91 crore (including 

encashment of accumulated 

past service leave of `32.21 crore and 

perquisite value related to employee 

stock options exercised during the year 

in respect of stock options granted over 

the past several years by a subsidiary 

company — `19.01 crore) . In both these 

cases, it is about people and calls taken 

that will fully fructify in the next 10 to 

15 years and create shareholder value. 

In both cases, the leaders seemed to 

have managed the transition with foresight by involving the 

next leaders into shaping strategy well in advance. 

Organic Growth 

When Naik took over L&T as CEO in 1999, it was a `5,000- 

odd crore company. Today, its revenues are over `1,20,000 

crore. This growth has come without acquisitions. In fact, 

some even argue that he has given a new meaning to the 

mission of Henning Holck Larsen and Soren Kristian Toubro, 

who had founded L&T in 1938. 

L&T’s journey to become a conglomerate and an engineering 

and technology powerhouse has involved building 

strengths in information technology, technology (defence, 

aerospace, nuclear, smart cities, complex structures) and 

financial services. In fact, the entire services portfolio was 

built with him at the helm. Construction, too, grew faster 

than most other businesses with entry into new areas such 

as water, power transmission and distribution, smart cities, 

BOTH DEVESHWAR 

AND NAIK HAVE 

MANAGED THE 

TRANSITION WITH 

FORESIGHT BY 

INVOLVING THE NEXT 

LEADERS INTO STRAT- 

EGY WELL IN ADVANCE 

ship building and even metro rail and it now accounts for 

about 55 per cent of revenues. Wherever there is a difficult 

construction job, L&T is seen as the go-to company. 

After taking over as the CEO in 1999, among other 

things, Naik resisted a hostile takeover attempt. He then 

went on to create an employee trust, which has 13 per 

cent stake in the company, as a bulwark against hostile 

takeovers. He also created a lot of wealth for managers by 

introducing employee stock options. Most employees in 

the company have been there for years. Even for Subrahmanyan, 

who had joined in 1984, L&T was his first job. 

Those who have worked with Naik say he can be very 

tough and demanding at work but is also very humane. 

The latter is evident from his initiatives around creating an 

employee trust and his deep involvement in charity work. 

Known for leading a frugal lifestyle and 

working for around 16 hours a day, he is 

rarely seen at corporate social events and 

avoids sitting on boards of other companies 

or industry bodies. He has pledged to 

spend 75 per cent of his earnings on charity 

and has set up a radiation centre in Surat; 

he is building one more such centre. He is 

also building an eye hospital in collaboration 

with Sankara Nethralaya in Navsari, 

apart from other initiatives there, including 

setting up a vedic education school in 

collaboration with the Banaras Hindu 

University. He has also set up a charitable 

hospital in Powai, Mumbai. Those who 

have known him over the years say he had 

decided in 2014 itself that Subrahmanyan 

would take over from him. He then 

groomed him for the next four years. This 

now leaves Naik time to focus on mentoring 

and CSR in his role as the non-executive 

chairman. 

Big Goals, Short Stint 

Clearly, if exits of Deveshwar and Naik from their executive 

roles are stellar examples of long-lasting veterans creating 

a legacy, it is hard to miss two examples of short period 

CEOs who, armed with rich experience of working in global 

organisations, were meant to be the change agents at two 

of India’s finest companies — Vishal Sikka at Infosys and 

Subhanu Saxena at Cipla. Both were hired from outside. 

Both tried to ring in fundamental shifts in business. Some 

of their bets paid off and some did not but their stints form 

an important chapter in the growth story of their companies. 

Both were hired to deliver the next phase of growth 

for their companies and both remained CEOs for just about 

three years — Subhanu Saxena between 2013 and 2016 and 

Vishal Sikka between 2014 and 2017. 

Where they differed was perhaps the manner in which 

they left their companies. Much has been written about 


CEO SALARY 


Subhanu Saxena 

He tried to change the 

Cipla model of partnering 

with players in 

different geographies to 

building frontend presence 

and focused on the 

US and Europe. Some 

of these efforts paid off 

and some did not. 

Remuneration in 

2016/17 (Apr-Aug): 

25.34 cr 

Sikka’s exit and the differences with founders/promoters. 

Saxena, however, left silently, citing family priorities. 

Despite the controversies and debates around Sikka’s exit, 

here is what the company said in a statement announcing 

the acceptance of his notice of resignation: “Under his leadership, 

Infosys launched breakthrough new programmes 

to drive innovation, education and entrepreneurship on a 

large scale.” 

Much like the different views about the man and his 

leadership, there are several elements to his compensation 

package — `16.01 crore for 2016/17. This does not include 

the options grant as it has not been exercised. Including 

the grant, the figure touches `45 crore-plus. Views on him 

differ depending on who you are talking to but analysts 

say things could have changed for the better. “Today, it may 

sound that Infosys paid a lot of money to Sikka, but had he 

been around for six more months he may well have been 

successful in transforming Infosys and perhaps then his 

compensation would have been viewed differently,” says Sudin 

Apte, CEO and Research Director, Offshore Insights. 

Under Sikka, the Infosys stock rose 22 per cent from 

`835 on August 1, 2014, to `1,021 on August 17, 2017 (price 

adjusted for bonus). On August 18, after the news of his 

resignation was out, it touched a low of `884.40. It has, 

however, moved ahead since then and was around `1,249 

on June 22. Sikka's golden parachute clause in his contract 

has also been in the news but his remuneration does not 

seem to show as if Sikka availed of it. 

Similarly, for Subhanu Saxena, his `25.34 crore (since 

Subhanu Saxena was the managing director and Global 

Chief Executive Officer for the period up to 31st August, 

2016, the above remuneration is for the period from April 

1, 2016, till August 31, 2016), the views on the impact he 

had would differ depending on who you talk to. Many say 

Saxena led the change from a partnership model where 

Cipla was more of a supplier to a domestic partner in an 

emerging market to building a front-end presence. He also 

put the spotlight on the US and Europe. As an analyst puts 

it, “Cipla’s journey towards the US was started by him. It is 

now a very promising market. He also set up front-end presence 

in some emerging markets such as South Africa and 

Yemen.” That continues to be the view with Cipla. What is 

arguably being reversed are some of the steps in biosimilars 

and foray into Europe. 

@EKumarSharma 


CEO SALARY 

COLUMN 

Suresh 

Raina 

Wai 

Leong 

Chan 

HOW TO HIRE 

YOUR HEAD HONCHO 

Both sides should take the long-term view 

because this is more than a transaction 

By Suresh Raina and Wai Leong Chan 

Negotiating and finalising 

the compensation of a Chief 

Executive Officer is probably 

the most interesting task, yet it 

is probably also the most challenging 

one too. 

For all stakeholders – the company, 

the search firm, and the candidate 

– to converge and reach agreement 

is perhaps the most complicated and 

least publicised process in any company’s 

functioning. 

Over the last decade, even in India, 

the CEO compensation design is 

slowly converging to global (Western) 

practices. For listed and (or) board 

managed companies, a nomination 

and remuneration committee is asked 

to drive the process. 

As the search consultant executing 

a given mandate, Hunt Partners, 

in most cases, drives the structuring 

of an offer, followed by handling negotiations 

with shortlisted candidates. 

We routinely advise clients 

to avoid direct negotiations with 

candidates. In our opinion, it works 

out better for both sides to have us 

playing intermediary. Why? These 

processes go through ups and downs, 

and can often become tense. With us 

serving as an intermediary, communication 

channels remain open. For instance, 

there was a case where a client 

– who handled their own negotiations 

– walked away assuming (wrongly) 

that the candidate’s expectations 

bordered on the edge of greedy. The 

client walked away. No one won. 

Now it is even more complex. 

The design of the compensation has 

become an art form, with specialist 

firms invited in, to help with the 

process. Layers of added complexity 

come in, in the form of time-tailored 

incentives – short, medium, and 

long term. 

Just understanding the structure 

takes time. In our process today, 

we always block some time with 

shortlisted candidates to walk them 

through each element of the compensation 

plan. 

Just recently, when we handled a 

growth venture set to launch an IPO 

in a few years the compensation offer 

had every possible component one 

BESIDES THE CASH 

COMPONENT, THERE 

IS SIGNIFICANT VALUE 

IN ITEMS SUCH AS 

COMPENSATION FOR 

RELOCATION, MEDI- 

CAL PLANS, RETIRE- 

MENT PLANS, ETC 

could think of, and more. There were 

fixed salary components, variables, 

stock options of the employer and its 

holding company. 

Unless one is able to authoritatively 

explain every element to 

candidates, arriving at a mutually 

acceptable final figure becomes 

difficult. Candidates and would be 

employers are already on tenterhooks 

about what figure the person walks 

away with at tenure end. Add to that 

a clawback clause (that is becoming 

the rage now), and an altogether new 

wasps’ nest is disturbed. 

Such negotiations can be extremely 

stressful for both sides. 

Candidates generally have very little 

experience with such negotiations and 

understandably, both sides are suspicious 

of the other. Balancing cheerful 

demeanour with focussed thought 

and the need for both sides to not be 

overly greedy is the key to a win-win 

out outcome. 

I always recommend strongly to 

all candidates that while it is absolutely 

fine to negotiate – as indeed 

they must – being realistic is more 

important. “Don’t be stubborn as you 

may end up killing a deal that might 

yield more in the longer-run if you 

are willing to take some risk,” we tell 

them. 

Many times, we’ve have seen 

negotiations break down just as a deal 

is being finalised, because both sides 

are stuck on one single point or issue. 


Almost inevitably, this will come down to a matter 

of emotion or ego. That is the point at which 

we step in and say, “If you sense this is the case, 

find another place to make up for it; or just let 

the matter slide”. By this point in the negotiations, 

the sensitivities involved are so high that 

it is very easy for both parties to miss the larger 

picture and lose the deal. 

For candidates it is extremely important to 

consider all the individual components of the 

entire package. Besides the obvious concern over 

the salary’s cash components, there is significant 

value in other items such as compensation for 

relocation, medical plans, retirement plans, 

termination agreements, and the like. 

A key strategy is for each side to identify 

exactly what they think is critical and what is 

merely desirable. We advise both sides to take 

the long-term view when negotiating because 

this is more than a transaction. After this 

process is completed, both sides need to work 

together for the company to grow and that is 

something neither can afford to forget. 

Another thing we always ensure is that all 

existing compensation related details and documents 

are made known upfront. Last minute 

surprises or additional requests after a negotiation 

is concluded are a complete no, no! 

There are also some interesting compensation 

options emerging these days – either as 

demands from the candidate, or as offers by 

employers. Some that we saw recently were: VIP 

seats for events, company car for personal use of 

the family, interest free loans, home security, and 

management training at Ivy League universities. 

In one case, the company bought an apartment 

for the CEO that he could then purchase 

whenever he wanted from them. But each year 

that he stayed with the firm earned him a 10 per 

cent discount on the price of the house. 

Once the terms have been agreed to, the 

deal needs to be captured in its entire essence. 

What was formerly, a two-to-three-page document 

now runs into 30 pages or even more, of 

employment contract, covering the employment 

terms, compensation, stock options and code of 

conduct. Included also are clauses on information 

security, confidentiality and intellectual 

property rights. In many cases we see specific 

scenarios being woven into the contract that 

could be unique (for instance potential conflict), 

and how these should be treated. In fact, now it 

is routine rather than unusual for a CEO to seek 

legal advice while negotiating a contract. 

Suresh Raina is Partner, Hunt Partners , 

and Wai Leong Chan is Partner, 

Eric Salmon & Partners 


84 

ECONOMY 

DRY RUN 

Despite government initiatives, India’s exports have remained below 

the 2013/14 levels. Exporters’ GST problems and rising trade barriers 

suggest fast growth is unlikely to materialise. 

96 

ADVERTISING 

BANKING 

104 

A DIGITAL 

CONUNDRUM 

Is digital advertising 

really effective? 

RISE OF 

THE ROBO- 

BANKER 

How financial 

technology companies 

are transforming the 

banking sector. 

INTERVIEW 

“We have to 

regain the 

credibility 

the industry 

lost” 

VOLKMAR DENNER 

108 

112 

MANAGEMENT 

DO SEARCH 

ADS REALLY 

WORK? 

They can be 

surprisingly effective, 

but most companies 

use them incorrectly.

THE HUB ECONOMY

Despite government 

initiatives, India’s 

exports have remained 

below the 2013/14 

levels. Exportersˇ GST 

problems and rising 

trade barriers suggest 

fast growth is unlikely 

to materialise. 

By Joe C. Mathew 

Illustration by Ajay Thakuri 

DRY 

RUN 

SUNIL HARJAI, A NOIDA-BASED 

leather footwear exporter, is worried. 

His value-added tax refunds worth 

`1.75 crore have been pending with 

the tax department for five years. 

Increased competition in the global 

market and supply disruptions caused 

by Goods and Services Tax (GST) 

last year and demonetisation the 

year before have hit his business. The 

turnover of his company, Siddharth 

Exports, has fallen from `35 crore to 

`20 crore. He fears he may have to 

rationalise his 400-strong workforce 

soon. “It’s getting worse. A lot of things 

happening around us are increasing 

the feeling of negativity among exporters. 

To make matters worse, other 

countries are growing and taking our 

business,” says Harjai, who is also the 

convener of the footwear panel of the 

Council of Leather Exports in India. 

Leather and leather-product 

exports are among the various labourintensive 

sectors facing a slowdown. 

Monthly foreign trade numbers given 

by the commerce ministry show that 

apparel exports for April 2018 were 

22.76 per cent lower than in the same 

month of the previous year. Apparel 

production declined for 11 straight 

months up to March. “Continued 

backlog in GST and release of rebate 

on state levies are affecting sentiment,” 

says H.K.L. Magu, Chairman, 

Apparel Export Promotion Council. 

Foreign trade data for May 

shows while exports rose 20 per 

cent to $28.26 billion, ready-made 

garments, gems and jewellery, 


ECONOMY > EXPORTS 

carpets, handicrafts and many other 

sectors, dominated by micro, small 

and medium enterprises (MSMEs), 

showed negative growth. “These are 

still facing the problem of liquidity 

as lending agencies have norms and 

GST refunds have slowed down,” 

says a third exporter, Ganesh Kumar 

Gupta, President, Federation of Indian 

Export Organisations (FIEO). 

India’s merchandise exports 

rose 9.8 per cent to $302.8 billion 

in 2017/18. While the government is 

eager to project this as an indication 

of recovering commodity exports, a 

study of the sectors that lag – mostly 

labour-intensive ones – shows the recovery, 

if any, is weak. The data make 

it clear that the government is far 

from achieving its target of $900 billion 

in goods and services exports by 

2020. “A 20 per cent annual growth 

rate (that was needed to achieve the 

2020 target when it was set in 2015) 

looks difficult, but much will depend 

on how commodity prices move,” says 

Ajay Sahai, Director General, FIEO. 

Sahai hints at rise in crude oil prices 

which will increase the import bill, 

pushing up the dollar value of refined 

petroleum product exports. Refined 

petroleum is one of the largest 

component of India’s export basket. 

“If food prices move up, along with 

prices of steel and other commodities, 

exports might rise in value terms, but 

the crucial issue is whether we are 

increasing our volumes, too. If not, we 

are adding to the unemployment in 

the country,” says Sahai. 

FIEO’s Gupta predicts 15-20 per 

cent export growth in 2018/19. The 

drivers will be northward movement 

in petroleum and commodity prices 

and depreciation of the Indian rupee. 

Slackening Growth 

$2,75,852 

5,00,000 

4,00,000 

3,00,000 

2,00,000 

1,00,000 

0 

-1,00,000 

-2,00,000 

2007/08 

($ million) 

2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 

Imports Exports Trade Balance 

Source: Directorate General of 

Commercial Intelligence & Statistics, 

Kolkata 

29 

35.5 

20.7 

13.6 

-3.5 -5 

40.5 

28.2 

21.8 

32.3 

-1.8 

0.3 

4.7 

Rate of change (%) 

-1.3 -0.5 

-8.3 

-15.5 -15 

5.2 

0.9 


The Challenges 

The story of India’s merchandise 

exports – which grew at 20 per centplus 

a year for nearly a decade and 

peaked at $314.4 billion in 2013/14, 

before another negative growth trend 

set in – is intrinsically linked with oil 

prices. “During boom time, if you look 

at the commodity composition, you 

will see that petroleum exports rose. 

The growth wasn’t led by manufacturing 

goods. All these oil companies, 

with huge refining capacities, got into 

international markets in a big way. 

Gems and jewellery was the other 

contributor. If you look at core manufacturing 

exports, there was never a 

major momentum. It wasn’t as if we 

acquired the ability to compete with 

the big guys. So in absolute terms, 

it was not great, though in relative 

terms petroleum exports made the 

difference,” says Biswajit Dhar, professor, 

Centre for Economic Studies and 

Planning, School of Social Sciences, 

JNU. Dhar says export growth fell due 

to decline in oil prices. “Export growth 

slowed because of low global oil prices. 

The value of exports came down and 

targets went haywire,” he says. 

But this time, rising oil prices 

might not be enough to make exports 

boom. The biggest reason is global 

uncertainty due to protectionist measures 

by trade majors like the US. 

“Even when the global economy was 

on the upturn, we were unable to 

increase exports. Now, if the global 

economy goes into a tailspin, it will 

become further difficult,” says Dhar. 

The government may not agree 

but Make-in-India has not made 

much difference to plans to make 

India a manufacturing power house. 

“Indian exports were not led by broadening 

or deepening of manufacturing 

or agriculture. There is no evidence 

that we are doing anything very different 

to turn the situation around even 

now. We talk about agriculture. But 

we expect the revival to happen primarily 

through foreign direct investment 

(FDI). Where in the world has 

this happened – you just sit back, do 

nothing, and FDI comes and does it? 

Additionally, because of GST-related 

INDIA SHOULD 

IDENTIFY THE 

CHAMPION SECTORS 

AND GIVE THEM 

FISCAL AND NON- 

FISCAL SUPPORT 

TO SELL IN BOTH 

ADVANCED 

AND EMERGING 

ECONOMIES 

GANESH KUMAR GUPTA 

President, FIEO 

WITH 18.7% GROWTH 

IN SERVICES 

EXPORTS, THE 

SERVICES SURPLUS 

ROSE TO $6.6 

BILLION IN MARCH 

2018, DESPITE THE 

24.3% EXPANSION 

IN SERVICES 

IMPORTS 

ADITI NAYAR 

Principal Economist, ICRA 

issues, MSMEs are struggling. Funds 

are not being made available. We are 

trying to box ourselves into a hopeless 

stage,” says Dhar. 

FIEO’s Gupta says solving domestic 

issues, including access to credit, 

cost of credit, especially for MSMEs, 

and payment of pending GST refunds 

can ensure some relief. He says India 

should identify the champion sectors 

and give them fiscal and non-fiscal 

support to sell in both advanced and 

emerging economies. “A product 

market-mix strategy will increase 

exports exponentially. The government 

should pro-actively engage with 

our trading partners, particularly the 

US, to safeguard the country’s trade 

interests,” he says. 

Exporters are also being hit by 

an increasingly cautious banking 

system. “It has affected flow of credit. 

Withdrawal of letter of offer and letter 

of comfort has added to the cost 

of exporters by 1-3 per cent. Sectors 

which are not doing well and require 

the most support are the worst-hit 

due to the rigid approach of banks,” 

says FIEO. 

Harjai makes the micro points 

clear. “Labour laws should be exportfriendly. 

Contract jobs should be 

allowed. Rate of interest for working 

capital loans should fall from current 

12 per cent to 3-4 per cent. Logistics 

costs should be protected from petroleum 

price hike. Once these three or 

four measures are implemented, we 

will become competitive at one-go,” 

he says. Harjai says exports should be 

taxed at zero rate and funds should 

not get stuck at the GST level. “I can 

give it in writing that once you give 

these things to me for one year, 

everything will be OK.” 

Government Action 

The pace and effectiveness of government 

actions can be debatable, but 

it has made attempts to minimise 

exporters’ woes. On May 29 this year, 

FIEO organised a press conference 

to highlight delays in GST and 

IGST refunds. It said refunds of over 

`20,000 crore were pending on account 

of IGST and input tax credit 


ECONOMY > EXPORTS 

(ITC) and many exporters have not 

been able to file for refund due to 

technical glitches as ITC and export 

happened in different months. One of 

the FIEO’s major demands was a look 

into the refund problem, a drive to 

liquidate pending cases and putting 

the refund process on track. 

Within hours, the government announced 

a Special Refund Fortnight 

drive from May 31 to June 14, in 

which Central and state GST officers 

tried to clear all GST refund applications 

received on or before April 30. 

The finance ministry was also at pains 

to clarify that pending IGST and ITC 

refund claims were to the tune of 

`14,000 crore and not `20,000 crore 

as FIEO alleged. 

The government is also actively 

engaging with the US to see that the 

threat of higher tariffs there does not 

harm exporters here. Commerce Minister 

Suresh Prabhu has just returned 

after a two-day visit to the US, where 

he held marathon meetings with key 

US trade officials, including US Trade 

Representative Robert E. Lighthizer, 

Secretary of Commerce Wilbur L. 

Ross and Secretary of Agriculture 

Sonny Perdue to take forward bilateral 

commercial ties. “The US has shown 

readiness to engage with us to resolve 

all outstanding bilateral trade issues,” 

Prabhu said, adding that an officiallevel 

meeting of the two countries will 

meet soon to take this forward. 

Given the confrontational approach, 

the US is adopting towards its 

key trade partners like Canada, China 

and the European Union, even an assurance 

for a comprehensive dialogue 

on all contentious issues is being 

considered as a reassuring gesture 

by government officials. 

Prabhu was also bullish about 

the prospects of Indian exports. The 

ministry has tasked the director 

general of foreign trade to work on 

export promotion measures that 

are compliant with the World Trade 

Organization’s stipulations. 

“India needs to enhance its cost 

competitiveness both on scale and 

pricing. It also requires a deeper understanding 

of regulatory frameworks 

CONTINUED 

BACKLOG IN GST 

AND RELEASE 

OF REBATE ON 

STATE LEVIES 

ARE AFFECTING 

SENTIMENT 

IN APPAREL 

PRODUCTION 

H.K.L. MAGU 

Chairman, AEPC 

of its strategic and export partners to 

chart a faster growth path,” says 

Commerce Secretary Rita Teaotia. 

At a macro level, government’s 

apex think-tank, Niti Aayog, is 

working on solutions to problems 

hindering export growth. “The 

world demand is quite good. Global 

economy is growing, global trade is 

growing. So, we have to get our act 

together and we are looking at what 

can be done. We will come up with 

some recommendations very soon, 

within weeks,” says Rajiv Kumar, 

Vice Chairman, Niti Aayog. He says 

the attempt is to identify measures 

the government needs to take to push 

exports. “The fact is that we have to 

do this and it is required. The growth 

in exports must go back to what it 

was in the 2003/04,” he says. 

Near Future 

With politics dominating in the last 

year of the government’s tenure, negotiations 

for new free-trade agreements 

are unlikely to gather momentum. 

Nor will the government dare to take 

any visibly pro-industry measures 

which may turn as anti-worker or antifarmer. 

Business-as-usual growth, 

aided by oil price-linked value growth, 

will continue. Non-petroleum and 

non-gems and jewellery sectors that 

contributed to growth also offer hope. 

The Indian rupee has been the 

worst-performing currency in Asia of 

late and, therefore, Indian exporters 

have gained over their competitors in 

Asia. However, many exporters who 

have hedged their risk or taken preshipment 

credit in foreign currency 

have not benefitted. “The sectors with 

high import intensity like gems and 

jewellery, petroleum, electronics hardware, 

etc., have marginally benefitted 

as they have taken a hit on their imports. 

However, the depreciation has 

helped handicrafts, carpets, marine 

products, agro-processed products, 

sports goods, apparels and textiles, 

and leather, which primarily depend 

on domestic inputs,” says FIEO. 

“Following the contraction in 

March 2018, exports reverted to year 

on year expansion in April 2018, led 

by high growth in engineering goods, 

chemicals, drugs and pharmaceuticals 

and electronic goods, which 

offset the decline in segments such 

as textiles, gems and jewelry and 

iron ore,” says Aditi Nayar, Principal 

Economist, ICRA. Nayar also notes 

that with 18.7 per cent growth in 

services exports, the services surplus 

rose to $6.6 billion in March 2018, 

despite the 24.3 per cent expansion 

in services imports. 

Assuming an average price for 

the Indian crude oil basket of $70 a 

barrel, ICRA forecasts that net petroleum, 

crude and products import bill 

will surge to $93 billion in 2018/19 

from $70 billion in 2017/18. It also expects 

the current account deficit to be 

$65-70 billion, or 2.5 per cent of GDP, 

in 2018/19. While the numbers, as the 

agency suggests, may not be alarming, 

macroeconomic conditions suggest 

challenging times for Indian exports. 

That perhaps could be the reason 

why FIEO’s Saha says: “Even if India’s 

merchandise exports grow 10-12 per 

cent by volume, one should be pretty 

satisfied.” 

@joecmathew 


THE HUB DIGITAL 

DRAWING THE 

DIGITAL CURTAINS 

The clear and present danger of 

personal data being leaked or 

stolen has been recognised. But 

India’s proposed law to prevent it 

needs to work out several issues 

before it can be finalised. 


Illustration by Safia Zahid 

HE purported leak of personal details of 

27 million members of the Employees’ Provident 

Fund Organisation (EPFO) earlier this 

year – confirmed by some stakeholders but 

denied by others – has sharpened concerns 

around digital privacy all over again. At the 

start of the year, the revelation that all the information 

provided by individuals to get their 

biometric Aadhaar identification numbers 

was being accessed by unauthorised agents, 

had caused a furore. These are only the most 

visible examples of the vulnerability of personal 

data that accumulate online – IT industry 

insiders are convinced that many more leaks 

take place, but to save face, organisations do 

not report them. Global digital security firm 

Gemalto has estimated that 3.24 million re- 

Tcords were stolen, exposed or lost in India in

DIGITAL > DATA PRIVACY 

2017, a 783 per cent increase over the 

previous year. 

The European Union has implemented 

its General Data Protection 

Regulations (GDPR) from May this 

year, but in India similar safeguards 

are still at the “white paper” stage – the 

paper formulated by a committee of 

experts led by Justice B.N. Srikrishna 

and released by the Ministry of Electronics 

and Information Technology 

(MeitY) a few months ago. However, 

the committee’s draft of the Data Protection 

Bill is expected anytime now. 

Sections 43 and 43A of the IT Act 

2000, as well as the IT Rules 2011 relating 

to Reasonable Security Practices 

and Procedures (RSPPs) to protect 

Sensitive Personal Data or Information 

(SPDI) do make negligent parties 

liable to pay compensation to victims 

of data leaks, but they are clearly inadequate 

to counter the tsunami of illegal 

data grabbing that has since begun. 

Similarly, though the Supreme Court 

judgement in August last year affirming 

the fundamental right to privacy – 

including online privacy – is an important 

shield against data misuse, some 

crucial definitions and regulations still 

need to be spelt out. Even the Supreme 

Court judgement recognised that personal 

information may sometimes 

have to be divulged to the state in the 

interests of national security. 

Contours of Personal Data 

The IT Act has spelt out the contours 

of SPDI: “passwords, financial information, 

physical, physiological and 

mental health conditions, sexual orientation, 

medical records and history, 

and biometric information”. Does the 

definition need to be expanded? The 

EU’s GDPR, for instance, also includes 

“online identifiers, location data and 

genetic information”. It is a tightrope 

walk because too broad a definition 

will impede legitimate commercial activity, 

but one too narrow would leave 

scope for personal data misuse. The 

right to privacy has to be balanced 

against competing rights, such as the 

right to do business or even a “right to 

innovate”. 

Again, India has some unique 

DATA DEBATE 

Some of the issues 

that the forthcoming 

law on data privacy 

will need to address: 

Definition of ‘sensitive 

and private’ information 

Levels of sensitivity of 

such information 

What constitutes ‘legitimate 

interest’ allowing 

parties to access such 

information 

Whether thrust of the law 

should be ‘rights-based’ 

or ‘protection-based’ 

Whether the law should 

be principle-based or 

rule-based 

Limits of access and use 

of data by companies 

even after getting 

‘consent’ rights 

Whether encryption 

of data should be mandatory 

and the level of 

encryption needed for 

different sectors 

Whether servers storing 

Indian data should be 

stored only in India 

Powers of the regulator 

likely to be set up to 

monitor data privacy 

features, which need to be factored 

in while defining what personal or 

sensitive data is. “Sensitive information 

is different in India because of 

the importance people here attach 

to caste and religion, and this should 

be taken into account,” says Kartik 

Shahani, Integrated Security Leader, 

IBM. Many felt, for instance, that the 

recent declaration of Class X and XII 

results by the Madhya Pradesh Board 

of Secondary Education, which also 

revealed which of the four categories 

– General, Other Backward Classes, 

Scheduled Caste and Scheduled 

Tribe – the successful students fell in, 

amounted to violating their privacy, 

and though technically not a leak, 

should never have been made public. 

(There is no reservation at the school 

level, unlike later – hence such categories 

should not matter.) 

Further, a data privacy law needs 

to take cognisance of various nuances 

of personal data and its privacy protection. 

“Privacy protection mandates 

for Personal and Sensitive Personal 

data need to differentiated to minimise 

harm to the individual,” says 

Rama Vedashree, CEO, Data Security 

Council of India, a NASSCOM initiative. 

But this should not translate 

into inhibitors for cross-border flow 

of data. “Banks, for instance, need 

to process and share information for 

credit rating, fraud detection, antimoney 

laundering, among others, 

warranting sharing of data that requires 

cross-border data flows.” 

N ew Rulebook 

India will also have to decide whether 

to take a “rights-based” approach as 

the EU has done – recognising privacy 

as a fundamental right – or a 

“protection-based” one like the US, 

which classifies some categories of 

information as private to protect the 

individual from excessive monitoring 

by the state, but allows collecting even 

this kind of information if the individual 

does not mind. There is also the 

question of deciding between a “principle-based” 

approach to data privacy 

and a “rule-based” one – the white paper 

is not clear about which it prefers. 


(The Indian Penal Code and Criminal 

Procedure Code, for instance, are both 

principle-based; the Companies Act is 

rule-based.) 

While a few experts believe that a 

list of straightforward rules would be 

easier to implement, most plump for 

the principle-based formulation. “The 

data privacy law should espouse principles 

by which privacy is protected and 

not get into rules because the implications 

and usage of the law will be wide,” 

says Pratibha Jain, Partner, Nishith 

Desai Associates. “Digital privacy cuts 

across industries, sectors, users, business 

to business (B2B) and business to 

customer (B2C). The rules would just 

be too many for a single law.” 

Besides, the rapid changes in 

technology of the last quarter century 

suggest it is impossible to predict the 

technology of the future. “How can we 

frame privacy rules for what we don’t 

know?” says Jain. “But if there are 

broad principles, jurisprudence can 

develop around them. A rule-based 

law would only have to keep catching 

up with new technology.” India can be 

influenced by the multilateral data privacy 

agreement Asia-Pacific Economic 

Community’s (APEC) Cross-border 

Privacy Rules (CBPR) system that facilitates 

privacy respecting data flows 

among APEC economies. 

Underlying the CBPR, for instance, 

are principles such as “cause no harm”, 

“balanced approach”, “reasonableness”, 

“appropriateness of usage”, accountability, 

and more, which India 

too could adopt. If a complaint of data 

misuse is made against a company, the 

APEC law considers the harm done to 

the complainant rather than the nature 

of the data referred to, and whether 

its collection should be constrained 

in future. 

There is much to learn from the 

GDPR as well, which prescribes, for 

example, the appointment of a digital 

privacy officer for all companies 

beyond a certain size, but at the same 

time eschews any restrictions on the 

flow of data between countries so long 

as GDPR norms are observed. It is also 

worth noting that the GDPR, though 

finalised in mid-2016, was implement- 

PHOTOGRAPHS BY SHEKHAR GHOSH 

“KEEPING IN MIND THE HUGE DIGITAL 

DIVIDE IN INDIA, CONSENT FRAMEWORK 

SHOULD FOCUS ON ENABLING INFORMED 

AND MEANINGFUL CONSENT FOR ALL” 

ed only two years later, giving companies 

enough time to inculcate data 

protection policies – India can consider 

providing similar leeway. 

Limits of Consent 

Banks seeking out and processing financial 

information is an example of 

“legitimate interest” in personal data 

– one of the bases under which the 

GDPR allows accessing it. Another 

basis is consent – by and large, agencies 

should be able to access personal 

data if the individual concerned consents 

to it. However, keeping in mind 

the huge digital divide that exists in 

India, consent framework should focus 

on enabling informed and meaningful 

consent for all, says Vedashree. Privacy 

regulations should mandate creation 

of clear and easy to understand privacy 

RAMA VEDASHREE 

CEO, Data Security Council of India 

notices. How these notices manifest 

should be left to the organisations. 

This would encourage organisations 

to develop innovative ways to bridge 

language and digital literacy barriers. 

The authority in charge of regulation 

of data privacy should also play a major 

role in driving privacy awareness that 

reaches the grassroot level. 

If reliance is to be placed on consent, 

it has to be informed and unambiguous. 

Currently, those downloading 

a new programme are usually asked to 

tick a box at the end of a consent form 

before they can use the programme. 

They have no option to modify the contents 

of the consent form, which in any 

case appears to most users as gobbledegook, 

and are rarely read through. Often 

users sign away rights to use their 

contacts and friends’ lists, and even 


DIGITAL > DATA PRIVACY 

“THE DATA PRIVACY 

LAW SHOULD ESPOUSE 

PRINCIPLES BY WHICH 

PRIVACY IS PROTECTED 

AND NOT GET INTO RULES 

BECAUSE THE USAGE OF 

THE LAW WILL BE WIDE” 

PRATIBHA JAIN 

Partner, Nishith Desai Associates 

videos and other files stored on their 

mobiles and laptops, to app development 

companies. Companies need to 

create different consent forms for different 

sets of users, as well as make 

them more comprehensible – having 

one comprehensive consent for allowing 

use of products may not always 

be fair. 

Experts feel that, ultimately, even 

when consent has been obtained, responsibility 

for data use should be 

with the organisations and companies 

which have sought consent, not the individuals 

who gave it. It is the organisations 

which should be held accountable 

for privacy intrusions, if any. “Companies 

would do well to document 

the steps they are taking to safeguard 

privacy, as well as the impact of these 

actions,” says Shaundra Watson, Director, 

Policy, at the global trade group, 

BSA Software Alliance. “If ever there’s 

a problem, they can demonstrate to the 

regulator all they have done, to show 

they take accountability seriously.” 

However, experts maintain that 

with “anonymised” data – data related 

to personal matters, but without the 

people accessed being identified – access 

rules should be much less stringent, 

if restrictions are to be placed 

at all. “The National Sample Survey 

Organisation (NSSO) has been collecting 

all kinds of personal data over the 

years, but without identifying the respondents,” 

says Jaspreet Singh, Part- 

ner, cybersecurity, at global professional 

services firm EY. “Companies should 

be allowed to process such information 

which does no harm to users, but will 

help companies understand consumer 

behaviour and improve their services. 

Countries like Japan and Singapore allow 

free use of data which has been ‘anonymised’. 

“Access to anonymised data 

will not be hindered by the new regulations,” 

said a MeitY spokesperson. 

Encryption and Storage 

The first step to guarding access to 

data is to encrypt it – store it in code. 

While there are minimum encryption 

standards, some sectors such as 

finance and telecom have to meet for 

their transactions. India does not have 

any overarching encryption law as yet. 

“Encryption should be part of overall 

policy so that even if data is hacked, the 

hacker will not be able to make sense 

of it,” says Rana Gupta, Vice President, 

Identity and Data Protection, APAC 

Sales, at Gemalto. “A minimum level 

of encryption should be set for each 

industry, since some industries such as 

banking need higher encryption than, 

say, manufacturing or media companies. 

Unless encryption is made law, 

industries will avoid it, because it is an 

additional cost, just as auto companies 

do not lower their engines’ emission 

standards unless legislation forces 

them to.” 

A related issue is the location of 

servers that store data of Indians. 

Should Indian data be stored only 

within Indian shores? Is it even feasible? 

Currently, most leading IT companies 

have their servers overseas. In 

April this year, Reserve Bank of India 

(RBI) mandated that payments companies 

at least should localise all their 

data, but has not responded after industry 

groups raised various concerns 

about the order. Two arguments are 

usually advanced in favour of localisation 

– first, in any kind of investigation, 

getting access to data stored overseas is 

difficult, despite the mutual legal assistance 

treaty (MLAT) which India has 

signed, and second, that data consti- 


THE TAKEAWAYS 

GDPR will increase compliance cost and enforcement 

burden for Indian businesses. However, there are certain 

things that India can adopt immediately 

GDPR gave companies 

two years to inculcate data 

protection policies after the 

final law was enacted 

Puts a lot of responsibility 

on organisation 

handling the data 

There is no restriction on flow of 

data between countries as long 

as protection norms prescribed in 

the GDPR are followed 

Every company beyond a 

certain size should have a 

Digital Privacy Officer to ensure 

better implementation 

GDPR recognises that consent is one basis of processing 

data and legitimate interest is another (where the company 

can show through documentation that the data 

was processed only to benefit the user) 

tutes an asset and Indian assets should 

be held in India, so that benefit from 

any kind of monetisation of the asset 

accrues to India. But the case against 

enforcing localisation is also strong. 

First, insisting on localisation will 

drive up costs of storing data, and may 

well lead to smaller players going out of 

business. Nor does localisation address 

the central issue of data misuse – if affords 

no additional protection. 

“The important thing is to have a 

law in place soon,” says Singh of EY. 

“We should not waste time drafting a 

regimented law. We should start with 

a basic law and gradually expand it to 

cover Internet of Things (IoT) devices, 

sensors, wearables and more.” The 

EU, for instance, may have passed its 

GDPR in 2016 and implemented it this 

year, but its forerunner the Data Protection 

Directive dates back to 1995. 

Implementing the Law 

Regulations are meaningless unless 

they can be rigorously implemented. 

The “Do Not Disturb” regulations, for 

instance, passed years ago, are still 

merrily flouted by telemarketers. “India 

should first see what it can enforce 

and frame its law accordingly,” says 

Shahani of IBM. The MeitY official 

maintains successful enforcement 

would need the cooperation of those 

being regulated. “For any law to be successful, 

we need a culture in both companies 

and government of collecting 

and processing data responsibly,” he 

says. “That will require re-engineering 

both processes and mindsets, and may 

take years.” 

All agreed that once the law was 

passed, it should be administered not 

by MeitY itself, but by an autonomous 

regulator, as several other sectors from 

the stock markets to power to telecom, 

have done. “It is important to have a 

regulator with its powers drawn from 

the legislation, instead of MeitY doing 

double duty,” says Prasanth Sugathan, 

Technology Lawyer and Legal Director, 

Software Freedom and Law Centre 

(SFLC), India, which gives legal 

support to software companies. “The 

law should clearly define the regulator’s 

powers, the redress mechanism 

for those with grievances, as well as 

the penalty for those who breach its 

orders.” The MeitY official confirmed 

that the ministry was, in fact, looking 

at setting up an independent regulator 

for data privacy, as countries like Japan 

and Singapore have already done. 

Finally, Indian users need to be 

educated on the importance of privacy. 

“For example, a person may share sensitive 

information with a stranger during 

a casual conversation,” says Singh 

of EY. “Or it could be something as basic 

as sharing contact numbers with a 

travel agency or printing one’s residential 

addresses on personal invitations, 

all of which can prove to be extremely 

risky. The Ministry of Consumer Affairs 

runs a consumer awareness campaign 

called Jago Grahak Jago and it 

would be a good idea for MeitY to run 

a similar one on the significance of privacy 

in today’s times.” 

@sonalkhetarpal7 


A DIGITAL 

CONUNDRUM 

Is digital advertising 

really effective? 

By Ajita Shashidhar 

Illustration by Ajay Thakuri

THE HUB ADVERTISING 

H 

ONCHOS OF TWO FMCG BEHEMOTHS, Proctor & Gamble 

and Unilever, have sparked off a global debate on the 

safety and efficacy of digital advertising. 

Marc Pritchard, Chief Brand Officer at P&G, recently 

called it “murky at best, fraudulent at worse”. He admitted 

his company had succumbed to the “latest shiny objects” 

without realising that the digital media buying chain lacked 

transparency. Pritchard pointed out that more consumers 

are installing ad blockers on personal devices due to “crappy 

advertising” and contested the claims of Facebook and Twitter, 

which offer their own measurement metrics. 

Keith Weed, Chief Marketing Officer at Unilever, in 

his keynote address at the annual meeting of the Interactive 

Advertising Board (IAB), said earlier this year: “Unilever 

will not invest in platforms or environments that do 

not protect our children or which create division in society 

and promote anger or hate. We will prioritise investing only 

in responsible platforms that are committed to creating a 

positive impact in society.” 

The concern of the two stem from advertisements being 

served alongside objectionable content on platforms such as 

Google and YouTube. A report by the Association of National 

Advertisers in the US also talked about lack of transparency 

in the $200 billion digital media buying industry. “The 

study highlighted that digital media buying is actually not 

as clean as one thought it was. So, digital platforms would 

go to a big agency and say I want to pass some of my digital 

(inventory). They would tell agencies that if you spend $1 

million with me, as a group I would give you a 5 per cent 

kickback under the table. All of a sudden this way of trading 

has taken off on a global basis,” explains Terry Edwards, 

Co-founder and Global Media Director, Firm Decisions – a 

marketing contract compliance specialist consultancy. 

Now, if an advertiser gets one million likes for an adver- 


ADVERTISING > DIGITAL 

THE INDIAN 

ADVERTISING 

INDUSTRY 

Ad pie: `55,960 crore, 

growing at 11% CAGR 

1 

4 

6 

36 

12 

41 

1 

4 

6 

15 

34 

40 

2016 

2017 

tisement on a social media platform, it is quite possible the media 

agency would have bought the ‘likes’ and the advertiser wouldn’t 

know – after all, media buying agencies don’t disclose how they 

bought digital inventory. In most cases, media agencies don’t buy 

inventory from platforms individually, but in bulk from aggregators 

such as Google or Facebook. “Google serves ads to multiple 

platforms. Its software interface follows consumers wherever 

they are going and serves them ads. So, if a sports brand wants 

to target 18 to 24-year-old football fans, it will follow the target 

group, through Google to the sites they visit, and you never know 

if some of those young fans consume 

content put out by an extremist group,” 

explains a senior marketing professional. 

The controversy around Google and You- 

Tube had led to several large advertisers 

– such as P&G, Unilever, Johnson & 

Johnson, McDonalds, Starbucks, AT&T 

40% 

of advertisers in 

the US are not 

comfortable with 

transparency levels 

of media agencies 

– to temporarily withdraw advertising 

from these platforms in the US and UK. 

When they returned, they started asking 

serious questions about safety and efficacy 

of digital platforms. 

In India, digital advertising grew 

32 per cent last year. It is currently 15 

per cent of the overall ad pie (`8,202 crore) and is expected to be 

worth `18, 986 crore by 2020. It is expected to be 24 per cent of 

the advertising expenditure by 2020. That is a huge chunk for advertisers. 

Moreover, Indians are increasingly consuming content 

on digital platforms. But Indian advertisers, too, have had their 

share of bitter experiences with digital media. ITC recently got 

into trouble when a fake video of its Aashirwad atta went viral 

on social media. The video said the atta contained plastic and 

impacted the brand’s market share by a few percentage points. 

ITC got a court order passed against circulating fake videos 

on the brand. “We had also reached 

out to Google and Facebook to pull 

down fake videos, supporting our case 

with relevant data. However, we realised 

it is tedious and time-consuming 

to get videos removed. We had to 

reach out to the legal system to pass 

an order against spreading of such 

malicious content and then had to 

use that to convince both Google and 

Facebook to do the needful,” adds the 

ITC spokesperson. 

Recently, Jet Airways, too, was 

hit by fake digital ads. A WhatsApp 

message claiming the airline was offering 

two free tickets to celebrate its 

25th anniversary went viral. The airline 

took to Twitter to declare that it 

was fake. In November last year, when 

IndiGo was in the news for the manhandling 

of a passenger by a staffer, 

an ad with the Jet Airways logo, that 

said: “We Beat Our Competitors, Not 

You”, went viral. The airline even then 

had used Twitter to spread the message 

that the campaign was not commissioned 

by them and it was against 

their ethos. “The reason this kind of 

fake content goes viral especially on 

platforms such as WhatsApp, because 

it is encrypted and one is unable to 

know who the originator of the content 

is,” explains a senior marketing 

professional. 


Television Print Radio Cinema Outdoor Digital 

1 

4 

6 

18 

33 

39 

1 

5 

4 

21 

31 

38 

1 

6 

4 

24 

30 

36 

2018F 

2019F 

2020F 

F stands for forecast; Figures in per cent; Source: Dentsu Aegis Network 

Advertisers are increasingly concerned on the efficacy and 

safety of the medium. They are beginning to ask tough questions, 

admit media agency heads. “With many global clients whose advertising 

budgets are upwards of `1,000 crore, we have disclosure 

models where we tell them how we buy, but ask for a higher fee. 

In digital, the volumes are huge and it involves multilevel transactions, 

so we need a higher fee. With smaller clients we have a 

“Consumers won’t 

change their digital 

consumption JUST 

BECAUSE THERE IS 

NO MEASUREMENT 

CURRENCY. We have 

to learn to work 

efficiently with 

the limited tools” 

SUNIL KATARIA 

Business Head (India & 

SAARC), Godrej Consumer 

fixed rate deal. We tell them where 

we buy and how we buy is our headache, 

but we give them the best deal,” 

explains Shashi Sinha, MD at IPG 

Mediabrands. Sinha agrees that digital 

media buying lacks transparency. 

“Digital media buying needs far more 

time, effort and specialised talent, 

which is expensive. Therefore, I tell the 

client that either you pay me more or 

do big volumes with me, which I will 

trade off,” adds Sinha. 

There is a transparency issue, 

admits Ashish Bhasin, Chairman, 

Dentsu Aegis Network. He attributes 

this to many fly-by-night operators 

trying to make a quick buck. “If I am 

buying impressions on a digital media 

platform, assuming that 100,000 human 

beings would be viewing it and 

out of that 50,000 were robots fooling 

around, then to me it is a loss. I have 

to know what I am buying.” Apurva 

Purohit, President, Jagran, claims 

that digital advertising spends have 

plateaued among serious spenders. 

“Advertisers are not getting the returns 

from digital that they hope to, 

and are questioning how to use this 

medium,” she says. 

Sunil Kataria, Business Head (India 

& SAARC), Godrej Consumer, 

says he is constantly in touch with 

his media-buying agency about safety 



and viewability. “The publisher can’t 

compromise with it, and has to be 

extra careful about serving the ad 

context. We have worked with our 

agency and negated 800 key words.” 

R.S. Sodhi, Chairman, Amul, calls 

digital advertising a hype. “We do 

need digital advertising to reach out 

to millennials, but am not sure how 

effective it is.” 

Digital Muck 

Digital advertising is being considered 

murky, even though an advertiser 

can get to know how many 

times a consumer has watched its 

ad. In traditional media, the agency 

keeps 2-3 per cent as commission. 

It’s straightforward and transparent. 

However, when one is spending 

`100 on digital, on an average `72 

gets spent on the media, while `28 

gets spent on the intermediaries – 

the agency, the buyer-trading desk 

and the seller-trading desk. “Out of 

the `72 to be spent, around 30 per 

cent are fraudulent clicks. Therefore, just 50 per cent of what 

the advertiser has spent actually reaches the consumers,” 

explains Vineet Sodhani, CEO, Spatial Access – a media audit 

and advisory firm, who claims most marketers are actually not 

aware of the spillage. 

The big challenge is lack of a common measurement tool to 

measure whether a digital ad on a platform is actually effective. 

Today, you go to an aggregator to buy inventory and eventually 

have no idea about which platforms the advertisement is being 

served on and who is watching it, unlike TV. The digital ecosystem 

is a black hole. All digital media platforms have their own 

measurement metrics in place. “We have a long history of providing 

neutral, agnostic measurement systems for the industry 

– from Google Analytics to DoubleClick. We also work with 

third-party measurement partners like Nielsen and ComScore 

and validate our own methods,” says Vikas 

Agnihotri, Director, Google India. 

Similarly, Amit Goenka, CEO, Zee International 

and Z5 Global, also claims 

that ZEE Entertainment’s over-the-top 

(OTT) platform, ZEE5, has plenty of 

tools and trackers that provide advertisers 

with relevant data on campaigns. 

“We also have tools in place that track 

and report whether ads been served or 

not. So, advertisers get a good sense of 

the efficacies that are being delivered by 

the campaigns we run.” 

But measurement tools offered by 

“I don’t think TV 

or print will go 

out of fashion in a 

hurry. I CAN’T SEE 

INDIA’S LARGEST 

AUTO MANUFACTURER 

saying that they 

will invest only 

in digital” 

SASHI SINHA 

MD, IPG Mediabrands 

35% 

Advertisers in 

the US have 

reduced their 

dependence on 

media agencies 

media owners are their own, and 

the advertiser has no option but to 

believe what the media owner is saying. 

In the words of P&G’s Pritchard, 

media owners are “grading their own 

homework”. 

Why Digital? 

So, why are marketers looking to 

increase their spend on digital advertising? 

Digital consumption is 

obviously on the rise and marketers’ 

money has to chase the media its 

consumer is moving to. Even people 

living in Tier- II-III towns are spending 

considerable time on their mobile 

screens. Moreover, digital offers more 

measurability – even though it’s a grey 

area – compared to other media, in 

terms of clicks, likes and number of 

downloads. “For a media planner this 

became attractive, as he gets an opportunity 

to prove to clients instantly 

that his campaign was effective as 

it attracted downloads and clicks,” 

points out Purohit of Jagran. 

While TV and print are ideal to 

build reach and awareness, the role of 


PHOTOGRAPHS BY RACHIT GOSWAMI 

“There is a role 

for the media 

you are taking. 

IT SHOULD FIT INTO 

YOUR OVERALL 

MEDIA STRATEGY. 

If you don’t do 

that, then it is 

wasteful” 

TARUN RAI 

CEO, JWT 

digital is to build engagement. However, 

most media planners look at 

digital to build reach and not engagement. 

Purohit says that this mistake 

has been committed not just by media 

planners but by media owners, too. 

“The mistake was chasing quantity. 

It’s only now that all of us are realising 

engagement is equally important.” 

Menon of Spatial Access believes 

media agencies make high margins 

(anywhere between 5 per cent and 

15 per cent) on digital and that’s the 

reason they push advertisers to invest 

in the medium. “Part of the success 

of digital is higher commissions and 

lack of transparency in digital media 

buying.” Advertisers, too, don’t want 

to miss the digital bus despite the 

grey areas in measurement. “Consumers 

won’t change their digital 

consumption just because there is no 

measurement currency. We have to 

learn to work efficiently with the limited 

tools,” points out Kataria of Godrej. 

“For us to say that we don’t want 

to be on digital would mean that we 

are not consumer- friendly,” agrees 

Anuradha Aggarwal, Chief Market- 

19% 

ing Officer, Marico. 

Godrej Consumer, for instance, uses 

Nielsen’s Digital Ad Rating tool that gives 

details about whether the ad served has 

Advertisers in the US been served to the right target audience 

agreed to undisclosed and a fair understanding of return on 

deals with their media investment (ROI). “Within 48 hours of 

agencies last year 

the breaking of the campaign, the data 

comes in. We have a number of largeand 

medium-sized advertisers subscribing 

to this tool,” says Dolly Jha, Executive 

Director, Nielsen India. Though the BARC industry approved 

measurement tool is likely soon, Jha says confusion over measurement 

will take a while to be sorted. “Getting super perfect 

measurement will take a while. But advertisers no longer need 

ratification whether they should use digital platforms to advertise. 

They have moved on to asking sharper questions. Can you 

tell me the ROI, is what they want to know,” points out Jha of 

Nielsen. 

Advertisers have even started putting their own measurement 

metrics to get the best out of digital media platforms. Peshwa 

Acharya, Chief Marketing Officer, Sterling Holidays, says: “We 

created our own digital funnel. We just don’t go by the measurement 

metrics offered by the platform.” Savvy brands don’t need 

middle men, asserts Mukul Vasnik, Chief Digital Officer, Arvind 

Brands, which spends close to 30 per cent of its advertising budget 

on digital. “We directly buy from the platforms. It is better we 

protect our consumer’s interests directly,” he says. 

However, Ravi Deshpande, Founder, Whyness, says digi- 



“If I’m buying 

impressions on 

A DIGITAL MEDIA 

PLATFORM... I 

have to know 

what I’m buying” 

ASHISH BHASIN 

Chairman, Dentsu 

Aegis Network 

tal advertising continues to be a side 

dish. “This medium will flourish if 

marketers put quality money in ideas, 

in the content we create and the strategies 

we create. It doesn’t happen at 

the moment, hence you haven’t seen 

the efficacy of the medium.” Most 

advertisers don’t understand the way 

the media should be treated. Chasing 

a consumer with programmatic 

ads (almost 70 per cent of the overall 

digital ad pie) often backfires. “If the 

quality of content isn’t breathtaking, 

you will fail to create that connection. 

It is unorthodox creativity. One 

can’t create linear, structured content 

and expect people to respond,” points 

out Deshpande. 

It has to be ensured that digital is 

a conscious part of the strategy of a 

particular brand, according to Tarun 

Rai, CEO, JWT – a marketing communication 

company. “There is a role 

for the media you are taking. It should 

fit into your overall media strategy. If 

you don’t do that then it is wasteful,” 

he says. The lines between entertainment, 

content, and advertising are 

going to get blurred, asserts Rai. No 

wonder digital media owners are now 

investing on content and trying to integrate 

advertising into it. Facebook’s 

OPAQUE 

WORLD 

Advertisers struggle to 

fathom the intricacies of 

digital advertising 

They don't have adequate 

transparency around their programmatic 

media investments 

to make the most informed 

business decisions 

Lack the necessary knowledge 

of programmatic media 

costs, agency/trading desk fees 

and performance details 

Need tools and guidance to 

manage and optimise their 

programmatic supply chain 

They are more successful with 

clear programmatic key performance 

indicators, aligned 

incentives, roles and responsibilities 

across all parties 

`3,000 crore bid for the IPL digital 

rights is an example. The social media 

giant has realised that blatant brand 

messaging doesn’t work. OTT platform 

Arre, for instance, makes large 

portion of its revenue through branded 

content. “We are seeing a shift in 

advertising from vanilla display ads 

to richer ad formats and video advertising, 

resulting from the growth in 

consumption of video content,” says 

Jaideep Singh, Director, Arre. 

Will digital ever replace traditional 

TV and print ads in India? Unlikely. 

“I don’t think TV or print will go out 

of fashion in a hurry. I can’t see India’s 

largest auto manufacturer saying that 

they will invest only in digital,” says 

Sinha of IPG Mediabrands. For digital 

advertising to be a quarter of the advertising 

pie in 2020, it needs a common 

measurement tool. But putting 

together a fool-proof tool is not easy. 

While the BARC tool could give clarity 

on how many people have viewed 

an ad and whether it has been served 

alongside good content, it won’t tell advertisers 

whether ads were viewed by 

humans and not robots. It remains a 

big stumbling block. 

@AjitaShashidhar 


THE HUB BANKING 

RISE OF THE 

ROBO-BANKER 

How financial technology companies 

are transforming the banking sector. 

By Kanishka Gupta 

Illustration by Ajay Thakuri 

EVA NEVER SLEEPS. Since 

she joined HDFC Bank about 

a year ago, she has been a 

super performer, having dealt 

with six million customers so 

far – answering their banking 

queries and helping them 

pay their bills. Eva (electronic 

virtual assistant), a chatbot 

which uses artificial intelligence (AI) 

and machine learning to process and 

understand language, was created 

by Senseforth, a financial technology 

(fintech) company with which HDFC 

Bank collaborates. 

Eva, with a success rate of around 

85 per cent, which has also recently 

been integrated with both Amazon’s 

Alexa and Google’s Assistant, is not 

alone. Her counterpart at ICICI 

Bank is iPal – devised by a number 

of local companies and a global tech 

player working together – which 

answers customer queries and enables 

bill payments, fund transfers and 

recharges. “Since its launch last year, 

iPal has interacted with over 7.1 million 

customers with nearly 90 per 

cent accuracy,” says B. Madhivanan, 

Chief Technology and Digital Officer, 

ICICI Bank. “It is the only chatbot in 

the country which enables financial 

transactions on mobile as well as on 

our website.” 

So too, YES Bank has Yes Robot, 

created by the fintech firm Gupshup, 

which does not speak but can chat 

with customers on Facebook Messenger, 

answering queries relating to account 

balance and recent transactions, 

as well as carry-out tasks such as 

transferring funds, recharging phones 

and paying bills. HDFC Bank also has 

another chatbot-enabled facility called 

HDFC Bank Onchat, conceived in a 

tie-up with Bangalore-based AI company 

Niki, which allows customers to 

book movie tickets and cabs through 

Facebook Messenger. 

But chatbots are only one of a 

range of innovations fintech companies 

have brought to banking, thereby 

reducing their human interface, 

bringing down operating expenses 

and improving efficiency. Bank of 

Baroda, for example, has partnered 

with fintech firm CreditMantri to 

launch a credit product that evaluates 

a loan applicant’s creditworthiness, 

using unconventional data and 

yardsticks, thereby enabling better 

credit-risk decisions. CreditMantri 

claims to have assisted in five million 

such decisions. 

ICICI Bank, YES Bank and 

HDFC Bank all use the services of 

ToneTag, which has created databases 

of encrypted sound waves for them, 

allowing customers to make payments 


BANKING > FINTECH 

without touching a button. ToneTag, 

which has 18 partners, maintains it 

has a base of 300,000 merchants and 

has reached 50 million customers. 

“While the banks drive customer 

demand, the fintech sector offers 

innovation and disruption through 

technology,” says Naresh Makhijani, 

Partner and Head, Financial Services, 

KPMG India. “By partnering with 

them, banks gain access to new market 

segments, create new offerings for 

existing customers, churn customer 

data and deepen their customer engagement.” 

HDFC Bank has also a humanoid 

at three select branches in Mumbai, 

Kochi and Bengaluru, called Ira 

(Interactive Robotic Assistant), which 

– equipped with AI and machine 

learning – helps the front- office deal 

with visiting customers. The second 

Humanoid, based on AI and ML, 

was launched in Bengaluru recently. 

“We were one of the early adopters 

of technology among banks,” says 

Nitin Chugh, Country Head – Digital 

Banking, HDFC Bank. “Today we are 

consolidating our digital leadership 

through collaboration with companies 

that give us the best solutions and applications.” 

Nurturing Fintech 

So strong is the trend that banks are 

even handholding fintech start-ups, 

whose services they then utilise. 

FinoPayTech – which provides digital 

solutions to acquire new customers, 

biometric products to store and 

verify transactions, and more – was 

incubated by ICICI Bank. YES Bank 

has an accelerator programme called 

Yes Fintech through which it has 

supported 1,000 fintech start-ups. 

It has institutionalised what it calls 

‘ART’ – alliances, relationships and 

technology – to explore partnerships 

and co-create solutions with fintech 

companies. “Currently, we are working 

with 20 fintechs to co-create solutions 

pertaining to data analytics, predictive 

models, chatbots, biometric user 

authentication techniques and more,” 

says Ritesh Pai, Chief Digital Officer, 

YES Bank. “We realise the possibilities 

GROWING SYNERGY 

Some instances of collaboration between 

banks and fintech companies 

BANK FINTECH CO PRODUCT 

HDFC Bank 

HDFC Bank 

YES Bank 

ICICI Bank 

Bank of Baroda 

ICICI Bank, HDFC 

Bank, YES Bank 

HDFC Bank 

Senseforth 

Niki 

Gupshup 

Group of 

companies 

CreditMantri 

ToneTag 

Asimov 

Robotics 

on this front. While machine learning 

and data analytics find their most 

common uses in the cross-sale of 

financial products, we are also investing 

in innovations which can lead to 

a more secure transacting experience 

for our users.” 

HDFC Bank has its ‘Industry 

Academia’ initiative, which allies with 

engineering and management schools 

Eva – answers voice queries and 

enables bill payments 

Chatbot allows booking of movie 

tickets and cabs 

Yes Robot – chats on Facebook 

Messenger, enables fund transfer, 

recharges, bill payments 

iPal – answers voice queries, 

allows fund transfer, recharges and 

bill payments 

Evaluates loan applicant’s 

creditworthiness 

Encrypts voice sounds waves, 

enables ‘contactless’ banking 

Ira – humanoid which performs receptionist 

duties, helps front-ofice 

deal with bank branch visitors 

to promote fintech start-ups, as well 

as an annual Digital Innovation 

Summit where start-ups make their 

presentations and the bank selects 

and backs the five best ones. “We work 

together, partake of each other’s learnings 

and this collaboration results in 

the creation of many differentiated 

and superior solutions,” says Chugh of 

HDFC Bank. “It enables us to remain 


agile in a fast-paced environment, 

while the fintechs get access to our systems, 

knowledge and customer base.” 

Brave New Future 

Fintech is even moving beyond transactions 

to help bank customers in their 

financial planning. Bank of Baroda 

and Lakshmi Vilas Bank have partnered 

with Fisdom, a Bengaluru-based 

fintech company, to offer financial 

planning and wealth management services. 

Axis Bank has teamed up with 

US-based fitness technology company 

GOQii to use the latter’s fitness band 

– which measures steps taken, calories 

expended, etc – for making payments 

as well, using the internet of things 

(IoT) and near-field communication 

(NFC). 

But perhaps the most ambitious 

in this respect is ICICI Bank. It is 

working to introduce IoT and machine 

learning in a big way in HR matters 

– answering employee queries, 

identifying vacancies in departments 

and prioritising transfer requests. It 

even aims to monitor employees’ staff 

canteen purchases and thereby track 

their health! 

In September 2016, the bank also 

announced the deployment of software 

robotics in over 200 business processes, 

including agribusiness, trade, 

and foreign exchange, apart from retail 

banking and HR. These robots perform 

around two million transactions 

every day, which include data entry 

and validation, automated formatting, 

reconciliation, and currency exchange 

rate processing, among others. “We are 

YES ROBOT HAS BEEN VERY WELL 

RECEIVED AND WE ARE EXPLORING 

FINTECHS WHICH CAN SUPPORT US 

IN DEVELOPING CONVERSATIONS 

IN LOCAL LANGUAGES 

RITESH PAI 

Chief Digital Oficer, YES Bank 

WE WORK 

TOGETHER AND THIS 

COLLABORATION 

RESULTS IN THE 

CREATION OF MANY 

DIFFERENTIATED AND 

SUPERIOR SOLUTIONS 

NITIN CHUGH 

Country Head, Digital Banking, 

HDFC Bank 

SINCE ITS LAUNCH LAST YEAR, 

iPAL HAS INTERACTED WITH OVER 

7.1 MILLION CUSTOMERS WITH 

NEARLY 90 PER CENT ACCURACY 

B. MADHIVANAN, 

Chief Technology & Digital Oficer, 

ICICI Bank 

the first in the country and among a 

few banks in the world to use software 

robotics, which emulates human actions 

and thereby automates all high 

volume tasks that are repetitive and 

time-consuming, cutting across multiple 

applications,” says Madhivanan. 

The investment has enabled ICICI 

Bank to reduce response time by 60 

per cent and increase accuracy to 100 

per cent, while employees focus on 

more value-added functions. 

Chatbots currently understand 

and respond only in English, but with 

smartphones and Internet connections 

spreading to the hinterland, 

many fintech companies are working 

on solutions that will be able to comprehend 

regional languages as well as 

the Hindi-English combination that 

is customary speech in many parts 

of the country. “Yes Robot has been 

very well received and we are now 

exploring fintechs which can support 

us in developing conversations in local 

languages,” says Pai of YES Bank. 

The possibilities with IoT are 

numerous and banks and fintech 

companies are busy exploring them. 

“We have identified opportunities for 

developing systems to automate payments 

related to movement of goods 

with banking systems,” says Pai of 

YES Bank. “We already have an application 

programme interface (API) 

for corporate clients to automate 

payments, and in coming days hope to 

leverage the existing APIs for working 

capital loans and supply chain financing 

payments as well.” 

The author is a Delhi-based 

freelance writer 


THE HUB INTERVIEW

It was Dr. Volkmar Denner's second 

visit to India since he became the top 

boss at Bosch, the world’s biggest 

automotive component manufacturer. 

It could not have come at a more 

remarkable time. The Dieselgate 

scandal of 2015 has just taken a turn for 

the worse with the arrest of Audi CEO 

Rupert Stadler last week. For a staunch 

proponent of the technology, there is 

much at stake for Bosch on how this 

controversy plays out. While Denner is 

concerned with the loss of credibility of 

the industry, he is also looking beyond 

the immediate. Taking an hour out of 

his three-day India tour, Denner shares 

with Sumant Banerji his vision on 

electric mobility, the need to straddle 

various technologies and Bosch’s big 

plans in India that include a `1,700 

crore investment roadmap over the 

next three years. Edited excerpts: 


INTERVIEW > VOLKMAR DENNER 

ow are you preparing 

for a future where the 

internal combustion engine 

would be a minority 

in your overall portfolio 

while hybrids and electric 

powertrains would enjoy 

a majority? 

This is something we have to 

prepare for and that is what 

we did. For many years we 

have kept investments very high in electric mobility. Not 

many people know or realise that Bosch is already the 

market leader in the largest electric vehicle market in the 

world – China. So, we do everything to prepare ourselves 

for the electrified future and we believe in an electric future. 

We also entered new markets in this area like twowheelers. 

From bicycles to scooters, we have been very 

active since many years. We believe in the electric future. 

But we are also convinced that the industry and, hence, 

Bosch too, needs an adequate transfer period. There has 

to be a balance of this shift so that we can ensure adequate 

employment in the industry. If it happens too fast, 

then it would be a problem. But if there will be a transition 

phase where we have a possibility to adjust, then for 

Bosch, as a technology leader, there are more opportunities 

and chances than threats. 

In the backdrop of the Dieselgate scandal, Bosch 

has been a vocal supporter of the technology, 

even displaying how new-age diesel engines 

emit far less NOx emissions than what has been 

prescribed. Yet, do you feel that it is a lost cause 

and regulators have already made up their mind 

against diesel in particular and combustion engines 

in general? 

In addition to being the Chairman, I am a scientist at 

heart. So, I believe in and go by facts. At present, very 

clearly, there are many emotions on this issue that dominate 

discussions and it is very clear that the industry has 

lost a lot of credibility in the process. We have to regain 

that credibility. At the same time, if we look at facts, we 

have shown to the world at large recently that there is no 

deficit in technology. We can make diesel engines using 

the current technology that has very low NOx emissions 

on the road. The question is how you use the technol- 

ogy and we have shown that if it is used and applied in a 

proper way then very low NOx emissions can be achieved 

with diesel engines. From that point of view there is 

nothing that works against diesel engines. We also have 

an obligation with respect to climate change and that is 

CO2 emissions. There we have to look into total CO2 

emissions from well-to-wheel, so we look at how we generate 

the electricity. This part is often neglected. We need 

very demanding CO2 emission targets as well that will 

necessitate diesel engines, too. 

Given the credibility crisis with the industry, are 

governments ready to listen when you say diesel 

can still be very clean? 

This is a question of credibility and an emotional issue. 

That is why I say we should also look at the facts. Okay, 

you do not want to believe us as an industry, but you 

should listen to statements that researchers and scientific 

communities are making. We want to help keep people 

mobile while improving air quality around the world. 

We’re making heavy investments to achieve this – and it’s 

paying off. A few weeks ago, we announced our breakthrough 

in diesel technology – Bosch engineers have 

succeeded in bringing NOx emissions down to just 13 

milligrams of nitrogen oxide per kilometre in road tests, 

according to the new European RDE standard. Our new 

solutions will not make diesel engines more expensive. 

Everything we have fitted to our test vehicles to reduce 

emissions is close to entering production – no additional 

hardware components are needed. We are pushing the 

boundaries of what is technically feasible, but by refining 

existing technology. For customers, diesel will become a 

low-emission technology, but will still be affordable. This 

does not mean Bosch is voting against electric mobility. 

On the contrary we want to take it further, but there 

has to be a transition period where various powertrains 

would coexist. You cannot switch off one technology and 

switch on another overnight. 

Is there juice still left in the combustion engine? 

One important trend we see, both worldwide and here in 

India, is the coexistence of powertrain technologies. With 

India leapfrogging from BSIV to BSVI, Bosch India, in 

collaboration with OEMs, is geared up to achieve BSVI 

from April 2020. The internal combustion engine will 

continue to be the mainstream solution for freight and 

passenger vehicles. At the same time, hybrid technology 

will be a vital stepping stone towards electrification 

in India, particularly due to the prevalence of stop-start 

driving due to traffic congestion. Where combustion engines 

are concerned, we believe the key to making them 

more eco-friendly lies in synthetic or carbon-neutral 

fuels, whose manufacturing process captures CO2. In 

this way, this greenhouse gas becomes a raw material, 

from which gasoline, diesel, and substitute natural gas 


connected mobility. In view of this, we believe it will take 

off much more rapidly in small-vehicle segments. 

What potential do you see for Bosch in India? 

India continues to offer promising opportunities for our 

business and broad product range. According to the latest 

global data, India has overtaken Germany to become 

the fourth-largest automotive market in the world. Automobile 

sales in Asia’s third-largest economy, including 

passenger and commercial vehicles, grew 9.5 per cent 

last year. In 2017, the Bosch Group registered total sales 

of around 2 billion in the Indian market – this is a solid 

15.4 per cent growth in euro terms. With such a promising 

future for the automotive market in India, we are 

confident about our continued growth here. 

The real story for us in India is the transformation 

of Bosch into a leading IoT company. We have been 

investing heavily to drive this forward. Our Adugodi 

location is being revamped from a manufacturing facility 

into a technology hub. Over the past three years, we 

have invested more than `370 crore ( 46.2 million) to 

create this smart campus, which is home to 3,650 of our 

18,000 engineers in India. Additional investments of 

`600 crore ( 75 million) are planned for further expansion 

of Adugodi. In terms of new business, last year, we 

set up a state-of-the-art artificial intelligence centre in 

Bengaluru, and our newly established Connected Mobility 

Solutions division is active in India, too, where it is 

helping shape mobility of the future. Over the next three 

years, we plan to invest an additional `1700 crore ( 220 

million) in India in total. 

can be produced with the help of electricity from renewable 

sources. Ultimately, we believe that the coexistence 

of combustion engines and electrification with hybridisation 

is an interim solution on the road to an electric 

future. For this very reason, Bosch has invested €400 

million (`3,195 crore) every year since the beginning of 

this decade in electro mobility. Currently, there are more 

than 8,00,000 vehicles on the road worldwide that contain 

Bosch components for electrified driving. 

Do you think the Government of India’s ambitious 

plan of having all electric vehicles on the 

roads by 2030 is feasible? 

It is far too short a time-frame to prepare for 100 per cent 

electric vehicles. First, you have to stabilise the electrical 

grid and build charging infrastructure for all these vehicles. 

It is a complicated system optimisation and you have 

to look at the whole value system. Is the grid prepared 

and what kind of electricity does it produce? It really is 

about last-mile connectivity. Somebody has to up and 

maintain the charging infrastructure. Having said that, 

electrification in India is expected to gain momentum via 

fleet operators, for which the pre-requisite is shared and 

Many companies also use India as a hub for 

R&D. Even in Bosch, India is your biggest R&D 

centre outside of Germany. Are you planning to 

build on that? 

India plays a very special role for Bosch. Our Indian 

engineers are currently developing a global telematics 

platform enabled by our local engineering and manufacturing 

set-up. This platform offers end-to-end solutions, 

including our connectivity control unit, integration of 

mobile network operators, development and operation 

of cloud-based services as well as smartphone app development 

and support for back-end solutions. Bosch India 

serves a global customer base through the telematics 

platform. It’s a good example of how we are harnessing 

local expertise to offer cutting-edge innovations for the 

global market – an approach we call “local for global”. 

Our newly established connected mobility solutions division 

will also help us serve growing demand for mobility 

in India. Bosch is shaping the connected future not 

only in the mobility domain. We have recently added new 

teams in India to drive the development of solutions for 

the IoT, which are tailored to local needs. 

@sumantbanerji 


DO SEARCH ADS 

REALLY WORK? 

THEY CAN BE SURPRISINGLY EFFECTIVE, BUT MOST 

COMPANIES USE THEM INCORRECTLY. 

Illustrations by Ajay Thakuri

THE HUB MANAGEMENT 

MORE THAN A CENTURY 

ago, the department store 

magnate John Wanamaker 

famously complained 

about his inability to 

gauge the effectiveness 

of the money he spent on 

advertising. Since then, 

technologies such as radio, 

television, and the Internet 

have given companies new 

venues for self-promotion, 

but the age-old problem 

persists: How to tell 

whether ad dollars are 

really boosting sales? 

That question is one 

factor driving firms to 

shift ad money to digital 

media. Not only are people 

spending more time online, 

but advertisers believe 

that companies such as 

Facebook and Google, 

which track people’s online 

habits, can put the right ads 

in front of the people most 

likely to buy (and the companies 

can measure what 

results). According to data 

from Accenture, digital 

media now account for 41 

per cent of large companies’ 

ad spending, and forecasters 

expect the amount to 

exceed 50 per cent by 2018. 

But the issue of effectiveness 

nags here, too. 

Although most advertisers 

have come to believe that 

ads delivered when a customer 

is searching specific 

terms are more effective 

than the static banner ads 

that once dominated the 

web, recent research has 

cast doubt on that. A 2015 

study found that when 

eBay started and then 

stopped advertising on a 

large search engine, the 

company saw no difference 

in traffic. “That paper 

brought into question 

whether these kinds of ads 

do anything or not,” says 

Michael Luca, an assistant 

professor at Harvard Business 

School. A subsequent 

study found that some 

advertisers are decreasing 

their spending on 

search ads. 

The studies piqued 

Luca’s curiosity. Since 

graduate school he’s been 

interested in how data, 

rankings, and reviews influence 

consumer behaviour. 

Over the past five years, 

he has published papers 

on the dynamics of college 

rankings and book reviews. 

He’s also conducted several 

studies of Yelp, including 

a widely publicised paper 

concluding that 16 per cent 

of the restaurant reviews 

he examined were fake. 

As Luca’s research began 

appearing, Yelp reached 

out to discuss how it could 

work with academics on a 

range of research questions. 

As a result of those conversations, 

during the summer 

of 2015 Luca and his 

colleague Daisy Dai (now a 

professor at Lehigh University) 

moved into cubicles at 

Yelp headquarters. 

The question they 

sought to answer goes to 

the core of Yelp’s business 

model: Do the ads that Yelp 

sells to small businesses, 

which give those firms’ 

listings prime position atop 

search results, deliver more 

customers? To answer it, 

the researchers designed a 

series of rigorous experiments 

and obtained Yelp’s 

agreement to allow them 

to publish the findings no 

matter what the experiments 

revealed. 

Luca and Dai created 

a randomised sample of 

18,295 US restaurants, selected 

7,210 that had never 

advertised on Yelp, and 

designed free ad packages 

for each one in that group. 

(The restaurants weren’t 

told about the ads or the 

experiment.) For the 

next three months they 

closely tracked user 

engagement with all the 

restaurants. Then they 

took the ads down to see 

what would happen. 

They found that while 

the ads were up, the restaurants 

in them got more 

page views than the others 

– 22 per cent more on 

desktop browsers, 30 per 

cent more on mobile devices, 

and 25 per cent more 

overall. Users requested 

directions to them 18 per 

cent more often, made 

13 per cent more calls to 

them, and clicked through 

to their websites 9 per cent 

more often. The differences 

disappeared as soon as the 

ads were taken down. “This 

was a big effect,” Luca says. 


MANAGEMENT 

“It looks like Yelp ads are a positive 

investment, even for a business that 

doesn’t ordinarily advertise. The value 

Yelp ads seem to provide is in surfacing 

brands to customers.” 

What if the study had shown Yelp 

ads to be worthless? Luca says that 

although those results would have 

been damaging to Yelp’s current 

strategy, they would have uncovered a 

need for the firm to focus more on 

alternative revenue models. “Platforms 

have to decide how to make money 

and what they can do to help customers 

who are using them,” he says. “If 

ads weren’t working for Yelp, maybe it 

would put more emphasis on charging 

companies to facilitate transactions or 

selling analytics packages.” 

Luca and Dai’s findings contrast 

with the results involving eBay, but 

Luca sees an important difference 

between the recent study and the 

earlier one. eBay is a well known 

brand whose name people are 

likely to type into a search engine; it 

makes sense that touting something 

consumers are already searching for 

would have little effect. Many Yelp 

advertisers are local businesses that 

few people have heard of; for unfamiliar 

brands like these, ads that propel 

them to the top of a list and create 

awareness can pay off. 

This isn’t to say that big brands 

should never invest in search 

advertising, Luca adds – but they 

should bear in mind that search ads 

work best when they alert consumers 

to something they’re not already 

aware of. For instance, Gap might 

forgo search ads that would pop up 

when users search the company’s 

name or its best-known categories, 

such as jeans, and instead pay to 

appear in results for categories it isn’t 

commonly associated with, such as 

shoes. “Bigger brands should use 

search ads to promote things about 

the brand that people wouldn’t 

otherwise discover,” Luca says. 

Q: Why are advertisers 

migrating from display 

ads to search ads? 

A: Display ads are a terrible user 

experience. Search ads are far 

more relevant to consumers. Even 

though they delivered significant 

revenue, we eliminated display 

ads from Yelp at the end of 2015. 

What have you learned 

about search ads’ 

effectiveness? 

Not surprisingly, search ads work 

better the more relevant they are 

to the user’s query. Firms that 

focus relentlessly on making their 

ad delivery systems absolutely 

relevant to the searcher do best 

over the long run, because they 

put the consumer experience first. 

What mistakes do companies 

selling search 

ads make? 

They should resist the temptation 

“USERS ARE REBELLING 

AGAINST ADS THEY 

FIND IRRELEVANT” 

If you type “Mexican restaurant” into 

Yelp’s search field, the results will 

include the highest-rated and the 

closest options – but the first two listings 

will show restaurants that paid 

to appear at the top (labelled “ad”). 

Those are examples of search ads, 

which are gaining ground on other 

forms of digital advertising. Matt 

Halprin, Yelp’s Senior Vice President 

for business operations, spoke with 

HBR about the effectiveness of search 

and other ads. Edited excerpts follow. 

to show marginally less-relevant 

ads for the sake of short-term 

revenue – such ads can undermine 

user retention. Similarly, showing 

too many ads at the expense of 

natural results is a poor trade-off. 

Users are rebelling against ads 

they find irrelevant. They will 

tolerate a few highly relevant 

ads, but they come to search sites 

for information, not ads. 

What are the takeaways 

for businesses from this 

new research on search 

ad effectiveness? 

Don’t shy away from having your 

product or service scrutinised by 

third-party research or review 

sites. If some of the results 

are poor, you’ve done your 

company a favour by drawing 

attention to a problem your team 

can now tackle. For companies 

that sell search ads, focus 

relentlessly on the consumer 

experience, deliver highly relevant 

ads, and the rest will follow. 

ABOUT THE RESEARCH “Effectiveness of Paid Search Advertising: Experimental Evidence,” by Weijia (Daisy) Dai and Michael Luca 

(working paper). This article was first published in March-April 2017 issue of Harvard Business Review (www.hbr.org). Copyright@2017 

Harvard Business School Publishing Corporation. All rights reserved. 


P.118 

SAFEGUARD YOUR 

ONLINE PRIVACY 

P.123 

HOW TO DEAL WITH 

THALASSAEMIA RISKS 

P.128 

LEADERSPEAK: 

MANOJ ADLAKHA 

FUTURE OF FLYING 

NO WINDOW TO 

THE WORLD 

Claustrophobics, brace 

yourselves; Emirates 

is experimenting with 

windowless aircraft.

MY FAVOURITE journey is looking 

out the window,” said American 

writer Edward Gorey. And most 

will agree with him. A window is 

a pathway to new light and new 

truths. Everyone loves a window. 

What, then, will it feel like to be 

stuck in a metal tube up in the sky, 

knowing there are no windows? 

First-class passengers on the 

Emirates’ Boeing 777-300ERs are 

about to find out. 

No more beautiful sunsets, no 

fluffy clouds flying by, no gazing 

into the horizon where the earth 

meets the sky. At least not for real. 

The Middle East carrier is set to 

have a go at virtual windows. What 

passengers get to see could be just 

as beautiful as the real thing, but 

what they see is a projection of 

what is outside, beamed on the 

THERE WOULD BE A PLETHORA 

OF SAFETY CONCERNS IF 

AN AIRCRAFT WERE TO GO 

ENTIRELY WINDOWLESS 

wall using fibre optic cameras. 

But why would Emirates bother 

tampering with an age-old functioning 

design? The airline is well 

aware that the idea of windowlessness 

could bother many passengers. 

There are sound reasons for 

going windowless. Removing windows 

will make the fuselage, or the 

main body of the aircraft, lighter, 

stronger in structure and able to fly 

faster. Fuel consumption will also 

go down and it will even enable 

wider seats. On top of that, CO 2 

emissions will be reduced. The possible 

benefits are not marginal but 

varied and truly substantial. 

So far, the windowless area is 

limited. But according to reports, 

the airline’s President, Tim Clark, 

has hinted that entirely windowless 

planes could be there in the nottoo-distant 

future. 

As one can imagine, there would 

be a plethora of safety concerns to 

work around if an aircraft were to 

go entirely windowless. There is a 

reason why passengers are asked to 

pull up the window shades during 

takeoffs and landings. In case of an 

accident, the rescue staff on the outside 

may need to look in to see what 

kind of help is needed. In the event 

of an evacuation, the crew will need 

to keep an eye out for both inside 

and outside. Also, keeping an eye on 

engines and other parts visible from 

the windows is important for flight 

safety. While the beamed image will 

suffice in most cases, what will happen 

if there is a power problem? 

One option could be leaving some 

seats (like the emergency exit row 

seats) with the regular windows. 

As for passengers who feel 

claustrophobic, it will be a psychological 

barrier to overcome, but 

perhaps the virtual windows could 

counter that feeling. 

OBJECT 

RECOGNITION 

SEEING AI 

SEVERAL smartphone 

apps purport to see for 

anyone with a visual impairment. 

But none does it as 

well as Microsoft’s new 

Seeing AI, which is currently 

available on the iOS App 

Store for free. The ‘channels’ 

are lined up at the bottom 

of the app’s screen and 

users can either memorise 

them or use the iPhone’s 

accessibility features to 

speak out the button being 

tapped. It can read short 

text such as the writing on 

a sign. For a whole page, 

there is a Document mode, 

which seems to have a 

problem as it incorrectly 

believes that the phone is 

in silent mode. Seeing AI 

can also look at currency 

notes and recognise the 

denominations, read a barcode 

and tell the user what 

the product is, describe the 

‘scene’ in front and recognise 

a colour, depending 

on the light. It can even 

recognise faces if these are 

‘taught’ to the app. 


PERSONAL TECH 

BOOSTING 

ONLINE 

PRIVACY 

A HOST OF BROWSER 

EXTENSIONS CAN HELP 

YOU KEEP AWAY SITES 

TRACKING YOU. 

By Nidhi Singal 

Illustration by Raj Verma

THE BREAKOUT ZONE 

E 

very time you visit a website, you 

leave behind a digital footprint. These 

traces of information might include 

search history, social media account 

information, and much more. Some 

of this is stored in the form of cookies, 

text files that contain two pieces of 

information — the name of the site and 

a unique user ID. Some of these cookies 

help you remain signed into your 

e-mail accounts, some remember your 

site preferences and some even present 

you with locally relevant content, 

improving the browsing experience. 

These are first-party cookies created by 

the websites you visit. 

However, there is a flip side too. 

A big chunk of cookies is created to 

track your profile or surfing habits. 

Often, these are third-party cookies, 

added on to the various websites you 

visit. While it is difficult to identify 

these third-party cookies, you can 

get rid of all cookies while deleting 

browser history, or change cookie 

settings in your browser to eliminate 

them altogether. But there is a catch. 

If all cookies are turned off, you may 

face trouble signing into your Gmail 

account or visiting many websites. Let 

us look at ways to safeguard oneself 

from unwanted third-party cookies. 

Built-in Browser Settings 

All leading web browsers have these 

settings built into them. You can 

block all cookies or just restrict thirdparty 

cookies. Under the ‘Privacy and 

Security’ tab on Chrome’s ‘Settings’ 

is the Cookie tab, which allows you 

to block third-party cookies and even 

grant permission to specific sites to 

save and read cookie data. 

Firefox users will have to navigate 

a little more. The can click on the 

‘Privacy & Security’ panel under 

‘Preferences’, go to the ‘History’ section 

and use ‘Custom Settings for History’ 

to choose ‘accept third-party cookies’ 

or 'reject third-party cookies'. 

Similarly, in Safari, ‘cookies and 

website data’ option can be accessed 

through the ‘Privacy’ option in 

‘Preferences’. With Opera, one has to 

visit the browser settings, followed by 

‘Preferences’, ‘Advanced’ and ‘Cookies’, 

whereas on Microsoft Edge, one can go 

to ‘Privacy and Services’ under ‘View 

Advanced Settings’. 

To be on the safer side, you can 

also turn on auto-delete cookies every 

time you close the browser. Within the 

cookies setting on Google Chrome, for 

instance, you can select the option to 

A LARGE NUMBER OF 

COOKIES ARE CREATED 

TO TRACK YOUR PRO- 

FILE OR SURFING HAB- 

ITS. OFTEN, THESE ARE 

THIRD-PARTY COOKIES 

‘keep local data only until you quit your 

browser’. With Firefox, select ‘keep 

cookies until I close Firefox.’ 

Extensions and Apps 

There are some web-browser 

extensions to protect privacy. 

Ghostery, available for almost all 

popular browsers, improves your 

browsing experience by giving 

you control over ads and tracking 

technologies to speed up page loads, 

eliminate clutter and protect data. It 

allows you to go with default settings 

or customise settings. The latter lets 

you block ad-trackers or choose the 

list of analytics options you want to 

allow. Ghostery also allows you to 

enable enhanced anti-tracking, smart 

blocking and even create a Ghostery 

account for syncing settings across 

browsers and devices. Once set up, 

the Ghostery icon appears next to the 

address bar that shows a report card of 

the number of trackers blocked, page 

load time and even the details of the 

blocked trackers for you to identify if 

they are harmless or intrusive. 

Another popular extension is 

Adblock Plus. It blocks banners, popups, 

tracking, malware and more. 

Clicking on the Adblock Plus icon 

next to the search bar gives you a 

report which shows the number of ads 

blocked on the particular page and in 

total. With just one click, you can turn 

on/off the blocker for a particular site. 

Adblock Plus can be customised from 

the Settings — this allows you to block 

social media icons tracking, block 

additional tracking, and allow/block 

acceptable ads that are non-intrusive. 

It also gives quick access to Whitelisted 

websites for which you have turned off 

ad blocking and more. The advanced 

option is for customising Adblock Plus, 

add or remove filter lists, and create 

and maintain own filter lists. It can 

also be used for disabling third-party 

tracking cookies and scripts. 

Disconnect finds companies 

that track people and then blocks 

their tracking requests. Available for 

Chrome and Firefox, this is a usersupported 

software that allows users to 

pay as much as they want annually. 

Another popular extension 

is uBlock Origin. With advanced 

settings, this one isn’t for beginners. It 

shows the number of requests blocked 

and gives a quick access to the list. 

Even the settings have a wide list of 

options to choose from, which includes 

auto-update filters, parse and enforce 

cosmetic filters, malware domains, 

annoyances, and more. 

@nidhisingal 



MULTIFUNCTIONAL 

swivel dial 

PRICE 

`8,990 

STYLISH 

but feels overweight 

at 960g 

POWER 

BUTTON 

used to switch 

between preset 

modes 

X-MINI SUPA 

BIG ON BASS 

BY NIDHI SINGAL 

COMPARED to the new breed of 

Bluetooth speakers, the X-mini 

SUPA at 960g weighs on the 

higher side. But the design and 

the sound output easily make up 

for that. SUPA comes with an 

elegant, straight-line design that blends 

well with any interior, be it home or 

office. It has a solid front grill, a swivel 

dial on top and a power button at the 

rear. In fact, X-mini has managed to do 

away with all unnecessary buttons as 

the swivel dial does it all. You can press 

it to pause or play music, rotate it to 

jump to the next track or rotate it and 

hold it a bit longer to control volume. 

Long pressing the power button at the 

rear turns the speaker on/off while a 

simple press switches between the two 

audio modes – voice and bass. It can 

be connected via Bluetooth or by using 

an auxiliary cable. There is a memory 

card slot at the rear and SUPA can play 

songs straight from the microSD card. 

I tested it with a few tracks and the 

audio output was impressive. Along 

with clear vocals, SUPA offered deep 

bass and balanced highs. Although the 

speaker has only two preset options, 

I was able to adjust the bass and 

the treble using the X-mini mobile 

application. The app is still in beta 

(unreleased) but acts as a remote control 

as I have been able to control the 

volume from a distance. However, the 

sound distorted at higher volumes. In 

all, the 20W sound output was good 

enough for a small house party or even 

an outdoor picnic. Using the dial button, 

I was able to answer incoming 

calls, which were loud and clear on 

both the sides. SUPA has a 2,200 mAh 

battery that takes close to three hours 

to charge but lasts over seven hours of 

music playback at 70 per cent volume 

over Bluetooth connectivity. Sold at 

`8,990, it is one of the best-looking 

speakers offering superb sound. 

120 I BUSINESS TODAY I July 15I 2018

DUAL CAMERA 

at the back for 

depth images; 

features 

beautification 

mode 

12 MP FRONT 

CAMERA 

captures great 

bokeh selfies 

IN-DISPLAY 

FINGERPRINT 

SENSOR 

for unlocking 

the phone 

GLASS REAR 

with soft finish 

VIVO X21 

TOP NOTCH 

BY NIDHI SINGAL 

WHAT’S THE NEXT BIG thing for smartphones? An 

in-display fingerprint sensor, and Vivo X21 is one of 

the first devices to come out with it. Unlike traditional 

sensors mostly placed on the bottom bezel of a 

phone’s front or pushed to the rear, the sensor here 

is embedded underneath the display and there is an 

illuminated fingerprint icon, making it easy to identify 

where the scanner is. Placing the finger on that 

spot instantly registers the fingerprint. However, 

setting up the scan or unlocking the phone for the 

first time took a little longer than expected. Initially, 

the sensor would fail to register the scan, but in less 

than a day, one would get the hang of how much 

pressure to apply. 

Another USP of Vivo X21 is the dual-camera 

set-up at the back – a 12 MP primary lens and a 5 

MP secondary shooter – easily capturing images 

in the bokeh mode. But there is no dedicated portrait 

mode setting and the same can be accessed 

by tapping on the portrait icon within the default 

photo mode. Next, the device suggests placing 

the subject within 2m for better portrait bokeh 

and I was able to adjust the depth effect in real 

time. There is also an option to switch focus and 

background depth after capturing bokeh images 

using the rear camera set-up. The 12 MP front 

camera does an excellent job of selfie shooting in 

portrait mode but does not support refocussing 

while editing. It also offers face unlocking. 

Overall, it is a sleek, good-looking device with 

possibly the highest screen-to-body ratio, giving 

a bezel-less feel. The 6.28 inch full HD plus 

AMOLED display has a notch on the top. The SIM 

tray is on the bottom panel along with the speaker 

grill and the micro USB charging port. 

The device runs FunTouch OS4, built on 

Android 8.1 Oreo. The notification bar can be 

accessed from the top, but one has to slide up 

from the bottom of the screen to access shortcuts. 

It is powered by a Qualcomm Snapdragon 

660 processor, comes with 6 GB of RAM and 

packs in a 3,200 mAh battery that managed to 

last a day with average usage. The phone comes 

with a fast charger that can top up 50 per cent of 

the battery in 30 minutes. 

As for browsing, streaming videos or capturing 

images, the X21 turns out to be a decent 

performer. There is no sign of lag or loss of frame 

while playing games. It is priced at `35,990, but 

then, OnePlus 6 has the same price tag and comes 

with a Qualcomm Snapdragon 845 processor, 

which feels snappier while gaming or switching 

between running apps. 



EXECUTIVE HEALTH 

IT’S ALL IN 

THE BLOOD 

KNOW WHAT THALASSAEMIA 

IS AND LEARN HOW TO AVOID 

FUTURE COMPLICATIONS. 

By E. Kumar Sharma 

Unaffected 

‘carrier’ 

Father 

Unaffected 

‘carrier’ 

Mother 

Unaffected 

1 in 4 cases 

‘Carrier’ and 

unaffected 

1 in 4 cases 

IN INDIA, MORE THAN 

`15,000 CRORE IS SPENT 

ON THALASSAEMIA 

TREATMENT EVERY YEAR 

IF YOU ARE A YOUNG 

EXECUTIVE contemplating 

marriage, it may be worth 

looking at your thalassaemia 

report and that of your 

partner. “It is a genetic 

blood disorder. People with 

this condition are not able 

to make enough ‘normal’ 

haemoglobin (Hb), which 

causes anaemia and related 

complications,” explains 

Dr Sanjay Arora, MD of 

Mumbai-headquartered 

Suburban Diagnostics and 

one who is passionate about 

spreading thalassaemia 

awareness. Haemoglobin is 

the iron-containing protein 

in red blood cells, responsible 

for carrying oxygen from 

the lungs to all body parts. 

Dr Arora and Dr Faisal 

Khan (he is medico-marketing 

and content head) point 

out that the key lies in building 

awareness and thus staying 

better prepared to avoid 

future health complications 

and the huge financial, 

social and emotional challenges 

that could follow. 

“The birth of a ‘thalassaemia 

major’ or affected 

baby can only be prevented 

if we know the thalassaemia 

status of the parents before 

the baby is conceived. If 

both parents test positive 

for the carrier state (it is 

called thalassaemia minor), 

they should go for a prenatal 

diagnosis during the first 

trimester of pregnancy to 

know if the baby is affected. 

If affected, medical termination 

of pregnancy is advised,” 

says Dr Arora. Blood 

tests and genetic tests are 

done to diagnose the same. 

India witnesses around 

10,000 thalassaemia major 

births every year. 

Common symptoms of 

the disorder include pale 

skin, weakness, delayed 

growth and even jaundice, 

leading to greater risks of 

infection, iron overload, 

gallstone, enlarged spleen 

and organ dysfunction. 

‘Carrier’ and 

unaffected 

1 in 4 cases 

Affected 

1 in 4 cases 

In India, an estimated 

1,00,000 people suffer 

from beta thalassaemia 

major while the average 

prevalence of beta thalassaemia 

carriers is 3-4 per 

cent of the population or 

35-45 million people. 

Depending on type and 

severity, treatment includes 

blood transfusion, iron chelation 

(removal of excess 

iron caused by blood transfusion) 

and bone marrow/ 

stem cell transplant. “In 

India, more than `15,000 

crore is spent on treatment 

every year and 90 per cent 

of it is borne by patients,” 

says Dr Arora. 

WHAT THE 

FUTURE 

HOLDS 

THERE ARE TWO CATEGORIES OF THALASSAE- 

MIA – major and minor. “If an individual inherits a 

defective Hb gene from either parent, he/she has 

thalassaemia minor (the person is a carrier). People 

who inherit defective genes from both parents have 

thalassaemia major,” explains Dr Arora. Those with 

thalassaemia minor do not show symptoms of the 

disease and lead a normal life. But individuals with 

thalassaemia major suffer from its adverse effects 

and require regular blood transfusion. Asked how 

research is helping with the treatment, Dr Arora says that gene 

therapy and cord blood transplantation, where stem cells from 

the umbilical cord blood of the mother are transplanted in the 

child with thalassaemia, could be of help. Foetal haemoglobin 

inducer drugs are also used to increase haemoglobin levels. 



LUXURY 

FIT FOR 

CONNOISSEURS 

FINE ART, CLASSY BRANDS, CRAFT 

WHISKY AND A TAILORED TOUR. 

BY PRACHI BHUCHAR 

Eyewear 

Stylish Shades 

PRADA IS GLOBALLY famous for fielding products 

that are whistle-worthy. Its Spring/Summer 2018 

Collection for women sports clean lines and skilful 

frames interspersed with feminine accents. The Prada 

Cinéma, an old favourite, has also made a comeback 

with metal detailing that is more nuanced and reflects 

the brand’s distinctive flat lens design. The men’s 

collection has a funky addition too in the form of Prada 

Game fashion show sunglasses, which are inspired by 

the world of cartoon graphics and virtual reality and 

are slick and modern. Bring on the shades. 

Brand 

AESTHETE’S 

CHOICE 

LUXURY TODAY goes far 

beyond the price tag. The 

finesse with which a brand 

straddles the space between 

beautiful design, high-quality 

material and craftsmanship, 

goes a long way in defining 

how it is perceived. Perona is 

a new Made-in-India brand 

that stands for artisanal excellence 

expressed through its 

use of the finest leather and 

fabrics, shaped into accessories 

and clothing on a par with 

top international brands. Its 

debut store at The Chanakya, 

New Delhi, is spread 

across 2,850 sq. ft 

and is elegant 

and understated, much like 

the brand. The gorgeous 

leather in a range of colours 

is crafted into classics like the 

tote bag and the backpack, or 

clothes like shirts and skirts 

that have a design language 

of their own. A must-visit for 

lovers of leather and design.

Single Malt 

A TRUE 

THOROUGHBRED 

IF YOU LOVE YOUR 

SCOTCH, and single malts 

at that, this piece of news will 

be music to your ears. The 

Bruichladdich single malt, 

distilled in Islay, is made using 

100 per cent Scottish barley. 

So, it is a real thoroughbred in 

the hallowed world of single 

malts. The unpeated whisky 

has now made its way to India 

where whisky is a national 

obsession of sorts. The single 

malt, matured in American 

and French casks, is, indeed, 

a collectable. The price is 

upwards of `13,000. 

Travel 

Dream Getaway 

IF YOU ARE ONE of 

those people who like 

to live life king size, the 

Aman Global Private Jet 

Expedition, created in 

collaboration with luxury 

travel designer Remote 

Lands, will be the dream 

getaway. The brand, 

which boasts some 

of the finest boutique 

hotels around the world, 

has curated an itinerary 

for 2019 that will leave 

the most seasoned 

luxury travellers salivating. 

Next year, between 

April 15 and May 6, a 

maximum of 16 guests 

will be part of this uber 

niche expedition that includes 

being on board a 

private jet and staying at 

Aman properties across 

nine countries – from 

Japan (Tokyo) and China 

(Shanghai) to Vietnam, 

Thailand (Phuket), Bhutan, 

India (Rajasthan), 

Greece, Montenegro and 

Italy (Venice). This is one 

epic journey that will set 

you back $1,26,888. 

Art 

CELEBRATING 

RAZA 

S.H. RAZA’S legendary brush 

with the palette began long 

before he became famous 

and now, after his death in 

2016, the Piramal Museum of 

Art, Mumbai, is holding S.H. 

Raza: Traversing Terrains, an 

exhibition showcasing his 

famous works. One of India’s 

most lauded artists, Raza’s 

works are a reflection of his 

French training and exposure 

to post-war American 

abstract clubbed with his 

love for all things Indian. 

The exhibition traces the 

artist’s evolution across five 

decades and explores the aspects 

of his relationship with 

Henri Cartier-Bresson, the 

French photographer who is 

said to have influenced 

him deeply. 

Interestingly, the exhibition 

has been in the making 

since 2010 and the exhibition 

space is progressive, 

with Braille texts and aids for 

the visually impaired. On at 

the Piramal Museum of Art, 

Mumbai, from June 24 to 

October 25.


Factfulness: Ten Reasons 

We’re Wrong About the 

World – and Why Things Are 

Better Than You Think 

By Hans Rosling with Ola 

Rosling and Anna Rosling 

Rönnlund 

Hachette India 

Pages: 342 

Price: `499 

EX-LIBRIS 

A CRITICAL INSIGHT INTO WHY WE 

ASSUME THINGS WILL GET WORSE EVEN 

THOUGH DATA SAYS OTHERWISE. 

By Govindraj Ethiraj 

HOW MUCH DO we understand the 

world around us? Who do we believe? 

Are things getting worse or better? 

The late Hans Rosling, doctor and data 

whiz, contends we are being misled. And 

we are being misled, he says in his seminal 

book Factfulness, because reporters 

and journalists – among others – are 

being misled too. 

Rosling builds this argument about 

our ignorance by focussing on a theme 

he has consistently done, across his book 

and in many TED speeches. That things 

are fundamentally getting better or 

improving, but we do not seem to know 

or pay attention. So, chin up and feel 

happier about life in general. 

Consider these examples: 

· The number of new HIV 

infections per million people has dropped 

from 549 in 1996 to 241 in 2016. 

· Deaths from disaster fell from 

971 out of 1,000 deaths per year in the 

1930s to around 72 in 2010-16. 

· Plane crash deaths per 10 billion 

passenger miles have gone down from 

2,100 in 1929-33 to negligible numbers. 

More specifically, 10 in 2016. 

· The share of undernourished 

has gone down from 28 per cent in 1970 

to 11 per cent in 2015. 

· The share of girls in primary 

school age enrolled has gone up from 65 

per cent in 1970 to 90 per cent in 2015. 

Although Rosling refers to India 

in some general examples, many of 

these data points also hold good for 

the country, reflecting the changes 

happening here. For instance, India’s 

poverty level (people living below the 

poverty line) fell from 407 million in 

2004/05 to 270 million in 2011/12, 

down 137 million in seven years, a period 

which also saw fast economic growth. 

Rosling says we often make mistakes 

because of our ‘straight line instinct’ 

where we assume things will get worse 

in a single direction. For example, we are 

living longer and healthier and yet the 

world is not going to get overpopulated. 

Global population will peak at around 11 

126I BUSINESS TODAY I July 15 I 2018

Business 

Bestsellers* 

billion in 2021. It is because people now 

have fewer children. We can see that 

even in India while the birth rate in the 

US has fallen to a 30-year low. 

So why do we jump to conclusions 

about our current state of affairs? 

Rosling says the human brain is 

hardwired with instincts that helped 

our ancestors to survive in small groups 

of hunters and gatherers. Our brains 

often jump to swift conclusions without 

much thinking, which helped us avoid 

immediate dangers. 

We crave sugar and fat, which used 

to be life-saving sources of energy when 

food was scarce. We have many instincts 

that used to be useful thousands of years 

ago, but we live in a very different world 

now. Not that we can cut out everything, 

the drama, the sugar and the fat, but we 

need to control it, our appetite for the 

dramatic, says Rosling. 

We are also drawn to extreme 

examples. The stories of opposites, 

Rosling argues, are engaging and 

provocative and tempting and very 

effective for triggering our gap 

instinct, but they rarely help our 

understanding. There will always be 

the richest and the poorest, worst 

regimes and the best, but the majority 

is usually found in the middle. 

Brazil is a classic example. The 

richest 10 per cent in Brazil earns 41 per 

cent of the total income which sounds 

quite disturbing. But that figure itself 

has dropped from 50 per cent in 1989 

and the number of Brazilians in the 

middle, earning $8-32 a day, has been 

rising steadily. 

Let us look at a non-Rosling 

example. Until three years ago, Delhi 

enjoyed its winters. Suddenly, we were 

aware that winter also brought high 

pollution levels. What brought it to the 

fore was data, including the realisation 

that Delhi was the most polluted city in 

the world. 

Rosling’s book is a critical new 

contribution to our understanding of 

the world around us, the good and, 

unfortunately, the bad. 

The Subtle Art of Not 

Giving a F*ck 

By Mark Manson 

Harper Collins 

Price: `499 

Catalyst 

Attitude Is Everything: 

Change Your Attitude... 

Change Your Life! 

By Chandramouli 

Venkatesan 

India Portfolio 

Price: `299 

By Jeff Keller 

Collins 

Price: `199 

Thinking, Fast and Slow 

By Daniel Kahneman 

Penguin 

Price: `499 

The reviewer is Founder of 

IndiaSpend.com 

*Top books by sales for June 5-19, 2018; includes only books 

released after Jan 1, 2015; information provided by

LEADERSPEAK 

MANOJ ADLAKHA 

Senior Vice President & CEO, American Express Banking Corp., India 

Q. The biggest challenge you 

faced in your career 

A. Every challenge presents an opportunity. 

How you respond and what you learn from 

it will define your path to progress. About 

10 years ago, I set up a company with close 

to 800 employees and gave it my best shot. 

It did not succeed and my lifetime savings 

were gone. But I have also learnt that it is 

important to have aspirations, it is okay 

to take risks and one must cut losses at 

the right time. All these help you bring in 

entrepreneurial thinking in a corporate 

setting and facilitate agile decision-making 

in a competitive environment. 

Q. One management lesson 

for young people 

A. There are three imperatives. First, 

think big, set lofty goals and don’t be 

scared of failures. Second, learn to 

focus, prioritise and manage time. 

Finally, foster a culture of collaboration. 


Q. Your best teacher in business 

A. Adversity teaches us the value of 

perseverance. Also, our customers are our best 

teacher and critic. Their feedback is wholly 

undiluted and driven by a simple premise – 

make their life better by making our service/ 

product better. I make it a point to read their 

letters, e-mail messages and social media 

comments. They keep us motivated and honest. 

Q. Two essential qualities 

a leader must have 

A. One is initiative. Leadership is about painting 

the big picture, taking bold steps and leading 

from the front. The other is empathy. Developing 

empathy will help you listen better to your 

colleagues, customers and business partners. 

“EVERY CHALLENGE PRESENTS AN OPPORTUNITY. 

HOW YOU RESPOND AND WHAT YOU LEARN FROM IT WILL DEFINE 

YOUR PATH TO PROGRESS.” 

128 Vol. 27, No. 14, for the fortnight July 2 —15, 2018. Released on July 2, 2018. Total number of pages 130 (including cover)

5_6172709873776590888

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