New Delhi: Shareholders of family-owned companies should question the quantum of emoluments being drawn by Chief Executive Officers (CEOs) of their companies, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said.

``In a world of transparency, it would be very reasonable for the shareholders of these [family-owned] companies to ask the question that if the top 10 CEOs of the country are earning this [less] salary, would you please tell me why you deserve more,'' he said in an interview to Karan Thapar in the programme `Devil's Advocate' telecast on TV channel CNN-IBN.

He said that ``if you look at the 10 best performing companies in India... find out the salaries of top CEOs and then consider how many companies that are performing nowhere near as well are paying their CEOs three-four times that salary.''

Replying to questions on Prime Minister Manmohan Singh's remarks on CEO salaries at the CII's annual general meeting last month, Dr. Ahluwalia said regulation of CEO salaries was a shareholder issue and should be decided by the remuneration committee of independent directors.

The Prime Minister did not mean that skilled and highly-skilled persons getting good salary in a competitive market is ``something to be objected to,'' Dr. Ahluwalia said. ``If you have a family-controlled business and they owe themselves large salaries it is not necessarily the best thing to do.''

Dr. Ahluwalia clarified that the Prime Minister's statement at no stage implied that there should be Government regulation on salaries of CEOs.

Instead it meant that vulgar display of wealth should be avoided.

The Prime Minister in the same speech had wanted the industry to avoid cartelisation and certain other types of profit-maximising activities, which might not be socially acceptable.

``I somewhat feel that there has been a hysterical reaction largely on the part of the media'' to the Prime Minister's CII speech, he said.

Talking about the GDP growth rate, he said that ``we need to be bolder than we are if we want to achieve 10 per cent growth rate. Ten per cent is not very easy to achieve.'' Only half a dozen countries have ever done it, he added.

He said the country needed to undertake bold reforms to develop the nation's infrastructure, which was the biggest challenge from the point of view of industry.

Dr. Ahluwalia also underlined the need for expediting reforms in the education sector and said there was a need to double the number of university-going population from the present 10 to 20 per cent in the next 10 years.

He also added that education was going to be a major constraint in the way of the nation's growth in the next 10 years and both political and institutional will would be needed to reform the university education system. — PTI

Printer friendly page  
Send this article to Friends by E-Mail