Managerial Remuneration in India: Of Changing Guidelines, Fatter Pay Packets, and Incentives to Performance

Abstract:     
In this study, we look into the changes made in Indian corporate laws regarding managerial remuneration. We also evaluate the effect of these changes on corporate performance. Based on the comparison of corporate performance data of 16 large Indian manufacturing firms vis-à-vis their managerial remuneration data, it is concluded that managerial remuneration has significantly increased over the last two decades in sharp contrast to corporate financial performance (both from efficiency and growth point of view). Questions have been raised whether such increase in managerial remuneration was at all justified.

Number of Pages in PDF File: 24

Keywords: remuneration, top management, compensation, performance pay, Indian corporate law, financial performance, incentives

JEL Classification: M52, K20, N65

Accepted Paper Series