Abhay Bhutada's Record-Breaking Salary_ A New Era in Executive Compensation.pdf

This presentation explores the recent shift in executive compensation trends in India, focusing on Abhay Bhutada’s record-breaking salary of INR 241 crores in FY 2024. As the former Managing Director of Poonawalla Fincorp, Bhutada's compensation package marks the highest for any executive of a publicly listed company in India, highlighting the growing trend toward performance-based pay and stock options. The presentation discusses how professionals like Bhutada are redefining executive compensation, aligning their earnings with company performance, and leading India’s corporate world into a new era of professional pay packages.

1. Abhay Bhutada's Record-Breaking Salary: A New Era in Executive Compensation

Redefining Pay Scales for Professionals

2. The shift in executive compensation trends in India
- Focus: Abhay Bhutada, former MD of Poonawalla Fincorp,
sets a new record for executive salaries
- Salary Milestone: INR 241 crores at the end of FY 2024

3. A Salary That Redefines Compensation
- Abhay Bhutada’s Salary : Highest in India for any executive of a
publicly listed company
- Comparison:
- N Chandrasekaran (Tata Sons): INR 135 crore
- Thierry Delaporte (Wipro): INR 167 crore
- Significance: Redefines how executive pay is structured, with
professionals leading the trend

4. he Shift in Executive Pay
- Changing Trends:
- Traditional high salaries were reserved for promoter-directors
- Professionals like Bhutada are leading the shift globally
- Performance-Based Compensation:
- Stock options now form 60% of top executive pay
- Salaries are increasingly tied to company performance

5. Stock Options: The Game-Changer
- Stock Options' Role:
- Aligns executives' interests with the long-term success of
the company
- Incentivizes strong company performance and growth
- Previous Record Holder: AM Naik of L&T, INR 221.5 crore
- Significant Shift: Stock options becoming a crucial component
of executive compensation

6. Abhay Bhutada’s Tenure at Poonawalla Fincorp
- Role as MD: Key player in expanding the company
- Achievements:
- Built a strong loan book of Rs 24,036 crore
- Positioned Poonawalla Fincorp as a major player in financial
services
- Leadership: Strategic vision drove company growth, contributing
to his record-breaking compensation

7. Ronesh Puri on Executive Pay


- Quote: “CEOs play a crucial role in company performance,
making performance-based incentives a good strategy.”
- Professional Managers' Impact:
- Professionals like Bhutada are pivotal to company growth
- Companies now recognize the importance of compensating
professionals fairly for their contributions

8. A New Era of Professional Pay Packages
- Industry Shift: Six out of the ten highest-paid directors
in FY24 were professionals
- Impact: Professionals are increasingly driving growth and
are being compensated accordingly
- Bhutada’s Benchmark: His INR 241 crore salary is setting
new standards in the corporate world

9. Looking Ahead
- Future Trends:
- India’s corporate landscape is adapting to global trends
- Professionals will play a bigger role in company
success, leading to further shifts in compensation
- Expectation: More executives will follow Bhutada’s lead as
companies prioritize performance-based incentives

10. Conclusion
- Key Takeaway: Abhay Bhutada’s record-breaking salary
highlights the shift toward performance-driven executive
compensation
- Looking Forward: This trend is likely to shape the future
of India’s corporate world, with professionals at the
forefront