Corporate Governance Issues in Executive Compensation: The Indian Experience (2008–2012)

Posted: 9 Oct 2013 Last revised: 27 May 2017

See all articles by Bala N. Balasubramanian

Bala N. Balasubramanian

Indian Institute of Management Ahmedabad; Formerly IIM Bangalore - Centre for Corporate Governance and Citizensip; Indian Institute of Management Ahmedabad

Samir Kumar Barua

Indian Institute of Management Ahmedabad

D. Karthik

Indian Institute of Management (IIM), Ahmedabad

Date Written: October 9, 2013

Abstract

While the 2011 Occupy Wall Street movement had the larger agenda of protesting against the influence of corporations in policy making and governance, one of its focal points was the growing disparity in the distribution of wealth and income across the world. The spectacular collapse of giants in the world of banking and finance between 2007 and 2009 revived the focused attention on the unduly high executive compensation paid by these organisations. The central issue in the compensation debate is what ought to be and what are in practice the determinants of such compensation. This paper explores these issues in the Indian context with special reference to the role of corporate performance, corporate ownership, and corporate governance in optimising CEO compensation in keeping with the shareholders’ interests. The study is based on published compensation data (both yearly absolutes and year-on-year changes) relating to the 5-year period 2007–2012 for the top 102 companies in the country.

Keywords: Governance, Corporate performance, Ownership, Stakeholders, CEO compensation

Suggested Citation

Balasubramanian, Bala N. and Barua, Samir Kumar and Karthik, D., Corporate Governance Issues in Executive Compensation: The Indian Experience (2008–2012) (October 9, 2013). IIM Bangalore Research Paper No. 426, Available at SSRN: https://ssrn.com/abstract=2337861 or http://dx.doi.org/10.2139/ssrn.2337861

Bala N. Balasubramanian (Contact Author)

Indian Institute of Management Ahmedabad ( email )

Vastrapur
Ahmedabad, Gujarat
India
+919167036140 (Phone)

Formerly IIM Bangalore - Centre for Corporate Governance and Citizensip ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

Indian Institute of Management Ahmedabad ( email )

Vastrapur
Ahmedabad, Gujarat
India
+919167036140 (Phone)

Samir Kumar Barua

Indian Institute of Management Ahmedabad ( email )

Vastrapur
Ahmedabad, Gujarat 380015
India

D. Karthik

Indian Institute of Management (IIM), Ahmedabad ( email )

Vastrapur
Ahmedabad, Gujarat 380 015
India

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