A surge in compensation for Independent Directors, with 151 joining the crore club
In FY23, India’s 10 highest-paid independent Directors, four of them women, earned anywhere between Rs 3.21 crore and Rs 6.74 crore, while the number of Independent Directors earning more than Rs 1 crore increased from 67 in FY18 to 151 in FY23.
Data compiled by primeinfobase.com for the Economic Times on the highest-paid Independent Director in FY23 at Nifty-500 companies revealed that Om Prakash Bhatt, former SBI chairman serving on the Boards of Tata Consultancy Services, Tata Steel, Tata Motors, and Hindustan Unilever, topped the list with a salary of Rs 6.74 crore in the last financial year.
Following closely were Adil Zainulbhai at Rs 3.91 crore and former Axis Bank CEO and MD Shikha Sharma at Rs 3.8 crore.
Others among the top 10 highest-paid Independent Directors in FY23 included Kosaraju Veerayya Chowdary (Rs 3.71 crore), Hanne Birgitte Breinbjerg Sorensen (Rs 3.65 crore), Pallavi Shardul Shroff (Rs 3.61 crore), Haigreve Khaitan (Rs 3.32 crore), Deepak Kapoor (Rs 3.31 crore), Damodarannair Sundaram (Rs 3.24 crore), and Kiran Mazumdar Shaw (Rs 3.21 crore).
The data is based on 492 NSE-listed Nifty 500 companies with available annual reports as of December 8, 2023. In cases where an Independent Director held a wholetime directorship position, only the remuneration earned as an Independent Director was considered, including commission and sitting fees.
Shriram Subramanian, MD at corporate governance advisory firm In Govern, noted that compensation for Independent Directors tends to be higher in large, globally scaled companies with high profit margins and substantial cash generation.
As companies increasingly adopt a professional and Board-led approach, the compensation for an Independent Director is expected to rise. Their competencies, insights and contributions to the company’s strategies and governance will become crucial for performance, according to Subramanian.
Historically, Independent Directors at prominent firms and groups, such as Tata Group, Reliance Industries and major IT companies like Infosys, have been among the best-paid. For instance, OP Bhatt received Rs 2.81 crore and Rs 2.48 crore from TCS and Tata Steel, respectively. Adil Zainulbhai received Rs 2.32 crore from Reliance Industries, and Kiran Mazumdar Shaw received Rs 2.5 crore from Infosys before retiring from their Board in March 2023.
