Few things are more frustrating than watching fat cat managers of companies and mutual funds awarding themselves exorbitant salaries even though their stocks or funds are not performing and are delivering sub-par returns.
We saw the shocking report a few days ago of how mutual fund managers are taking home salaries which are unconscionable. In fact, two worthies of a large mutual fund have drawn salaries in excess of Rs. 25 crore each even though the funds managed by them have been put “under watch” for consistent under-performance and failure to even beat the benchmarks.
The shareholders of Tata Consultancy Services (TCS), the blue-chip behemoth belonging to the venerable Tata group, couldn’t tolerate the situation any more.
When N Chandrasekaran, the CEO, who already draws a handsome salary of Rs. 36 crore per annum, appeared before the shareholders pleading for an increase in his wages, the shareholders gave him and Cyrus Mistry, the Billionaire Chairman, a piece of their mind.
“We have imposed restrictions on age in this country. We should impose restrictions on income. This is not the Tata tradition. This is uneven distribution of income” a geriatric shareholder fumed.
“We haven’t had a bonus for six years. Humme Sikka jaisa aadmi chahiy. Woh khaata hai, khaane bhi deta hai. Kitna bonus share diya Infosys mein” another shareholder lamented.
Other shareholders voiced their ire at the fact that TCS is implementing “American practices” in a poverty stricken Country like India and that the same is being paid at the cost of shareholders who are barely eking out a living.
The revolt of the TCS shareholders at the AGM resonated in other places as well.
While the punters at MMB demanded “accountability” from the management of TCS, twitter was also abuzz with complaints from exasperated shareholders:
As a #TCS shareholder, I agree. Growth has slowed down, shareholders get nothing but Chandra continues to earn big. https://t.co/bP9D6TkXpk
— Abhinay Verma (@itsabhinay) June 18, 2016
The CEO should realize that the entire team is behind the TCS success, he is not the only one. https://t.co/C76ysy8NGQ
— Ravishankar S B (@Sb52R) June 18, 2016
What also irked the shareholders of TCS is the fact that Abidali Neemuchwala, the CEO of Wiro, who is as competent as the TCS CEO, took home a much smaller salary.
The frustrations of the shareholders can be well understood because over the past 24 months, TCS has given a measly return of 14%. The return over the past 12 months is a mere 3%.
The poor performance of TCS stands in sharp contrast to the performance of Infosys which, under the dynamic leadership of Vishal Sikka, delivered a fabulous return of 45% over 24 months and 18% over 12 months. Sikka took home Rs. 49 crore as salary but shareholders are not grudging that because they have also been handsomely rewarded.
Now, we have to see how long it takes for the message to percolate to the fund managers of mutual funds and for their salaries to be made commensurate with the performance of their funds!
They are just filling their coffers , caring damn for the shareholders .It is Only shareholders confidence and support that helps company during tough times.They should first achieve the goal maximising shareholders wealth and than only demand pay hikes.
Ppl who are profiting with capitalistic society want to have socialism.
#Niveza Review::
Salaries of Mutual Fund House managers is really creating some hype in the market. Few days earlier there was list of the managers who draws salaries between INR 10-35 crore. But the point to focus is that does really they deserve. As the stats showed that even they didn’t beat the market, benchmark and still asking for salary hike. Shareholders are in some worries as their investment stood no way near their expectations and the capital is getting stuck. TCS was really dealing with some underdog performance. Street was expecting something better out of the company but company failed to deliver.
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