Sensible pay for CXOs: Sebi

The Securities and Exchange Board of India (Sebi) on Friday said companies need to act more sensibly while determining the pay packages of senior executives as a growing number of institutions and public figures including bankers and business leaders are being questioned and scrutinised by the public.

“An area which is drawing serious attention globally is the manner and extent to which compensation of senior executives are being determined. Companies after companies are paying their CEO’s inexorbitant salaries even if the company has been making losses. I am reminded that if salaries and perks of politicians and civil servants are enhanced there is a strong public reaction about the burden that it would create on the public and whether there was a moral hazard in people in control of public finance appropriating more and more for their own salaries and perks. Now, going by the manner in which the corporate leaders have behaved in the last 10 years or so, similar questions are being raised,” said U.K. Sinha, chairman, Sebi while delivering the J.R.D. Tata Memorial Lecture.

Sebi has also asked companies to raise the standard of corporate governance.