In the past ten days Salman Khurshid has advocated a return to 1980s Comptroller of Capital Issues style pricing, and also done the headline-hogging complaint about Indian CEOs drawing too much pay. The CEO pay issue is truely bizarre and WTF, for a number of reasons, including:
- As Deepak Shenoy points out, Khurshid is currently getting free acco in a house that would rent out at 10 lakhs a month if it was on the market.
- US CEO compensation is an issue because half of Wall Street has been nationalised and so the government has a right to decide compensation policies. What the hell is the Indian government losing if CEOs are paid too much?
- As this Business Standard oped points out (link will decay eventually), it’s not even like Indian CEOs are paid obscene amounts (not only by global standards, but by Khurshid’s own standards). So what is the bogeyman of vulgar salaries that he’s raising? The true scandal occurs in the millions of small companies where the directors or majority partners siphon money out at the expense of minority shareholders and employees, as the Satyam issue showed us.
- And culturally, it’s not like Indians resent highly paid CEOs. They want to be highly paid CEOs. The mango man’s reaction to high pay is aspiration, not envy. So what vulgarity?
Forget all that. Even if Indian CEOs were paid obscene salaries, and Indians resented this, and Salman Khurshid wasn’t a sanctimonious arsehole living off the public trough, this is India, where we outperform the rest of the world when it comes to innovation in corruption and fiddling accounts. If there’s a salary cap on CEOs, does he really think companies won’t find a way to get the money to the CEOs off the books anyway? Gah.
Searching for a reason for this utter lunacy, I’ve come up with:
- Salman Khurshid is a moron. This explanation has the benefit of fitting Hanlon’s Razor.
- Salman Khurshid wants CEO salary to start getting paid out in black money and lots of manipulation in IPO issuing so that the amount of black money in the economy increases. After all black money is the lifeblood of the Congress party.
- Salman Khurshid is trying to raise money from Indian businesses ahead of the Haryana and Maharashtra elections. “Nice salary package you have here. Shame if anything happened to it.”
- The whole thing is not for the benefit of Indian CEOs, or the media, but for Sonia Gandhi, who Salman Khurshid is trying to impress by showing how quick he is to catch up with American trends.
Anything I’ve missed?
(Pssst: Sainath gets into the act too, and manages to not mention Vidarbha or the HDI. There’s hope yet.).