The Hindu : Karnataka / Bangalore News : Gowda wants cap on CEO salaries

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Friday, Apr 10, 2009
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Gowda wants cap on CEO salaries

Special Correspondent

BANGALORE: Janata Dal (S) supremo and former Prime Minister H.D. Deve Gowda has defended the need to put a ceiling on the total remuneration of the corporate chief executive officers (CEOs) in the country.

Speaking after releasing the Kannada version of the Janata Dal (S) manifesto in Bangalore on Thursday, Mr. Gowda said certain hard decisions were necessary if the gap between the rich and poor had to be narrowed. In its manifesto, the party said it would put a ceiling on the nature and quantum of total remuneration of the corporate CEOs like in the U.S.

Mr. Gowda said he was prepared to face the negative fallout arising out of his party’s stand on corporate salaries. “I also know that they don’t cast their vote,” the former Prime Minister added. “Some of them receive Rs. 13 crore to Rs. 15 crore per annum. What do they do with that kind of money? Do they sleep on it?” he asked.

Mr. Gowda expressed concern over the absence of a system to put a cap on the salaries of judges and the President. “There is no cap for increasing salaries in judiciary. They raise it themselves. Who will put a cap on the salary of the President, which was recently increased?” the JD (S) chief questioned.

Referring to the series of corporate scams that rocked the country post-liberalisation, Mr. Gowda said the Satyam scam had exposed the weaknesses in corporate governance. Hence, he said, the JD (S) would amend the company law to make any corporate fraud a criminal offence punishable by long-term imprisonment.

The party sought to make it mandatory the appointment of one-third of the directors on the corporate boards of listed companies as independent directors chosen by SEBI. The Company Law Board would select and appoint independent directors for the unlisted companies. Mr Gowda said the JD (S) would introduce a scheme of wage subsidy to encourage the private sector to employ OBCs, SC/STs and qualified children of below the poverty line families.

“The wage subsidy will be in proportion to the wage bill of the enterprise, which employs OBC, SC/ST and other specified candidates and would be adjusted against the tax payable by the enterprise,” he said.

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