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Board of Directors - Compensation?

A study on Executive compensation
By
Dr Cherukupalli Usha Rani
Consultant (Finance and HR)

and
Mr. Shaik Masood
Asst. Professor of Finance & NCCMP Coordinator
SEBI Resource Person
Alluri Institute of Management Sciences
masoodfru@gmail.com







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Abstract: Are we doing really justice to Board of Directors, CEOs and other Executives with the pay package fixed
in India? No. Not at all. People interpret board of directors, as if they act against the rights of the
shareholders. So there is a need for a good Corporate Governance to protect the rights of the shareholders
from oppression and mismanagement by board of directors and CEOs of the company. They also think that
corporate governance is framed in favour of employees, suppliers, and community. Public project board of
directors and CEOs as they manage company to show their power and prestige. Our objective behind writing
this paper is how in fact both board of directors and shareholders work together with an expectation, to earn a
fair rate of return for their investments. If every individual in every organization follows ethics and morals
shareholders will invest their money so that organizations can maximize profits with such large amount of
share capital. Head of every division is held responsible for the capital employed and its cost as well as value
of rate of return. Cash flow is deducted from the profits on the basis of ROE. Every division should work for
the optimum utilization of capital employed. In another way it is an internal competition. Shareholders
sometimes invest in companies even if rate of dividend is less than the bank interest. But why?

Key terms: Corporate Governance BOD, CEO, Ethics, Compensation, Code of Conduct, Shareholders, AGM






















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Introduction

Board of Directors: They are held responsible and accountable individually and with all other board members for any
ultra vires action against the corporate governance. And they are answerable and accountable to shareholders and to
general public. Board is held responsible for the success and failure of the company. In fact board will work for the
growth of the company and they serve for the company with the help of experts such as CEOs and other executives.
But ultimately board take the responsibility on behalf of shareholders. In olden days any business was run by
shareholders and directors because they all belong to same family. Later it has taken a different shape so appointment
of directors by shareholders on the basis of rotation system has been implemented under the umbrella of Corporate
Governance. Shareholders appoint the directors in annual general meeting (by rotation) (U/S 166) held at the end of
every year , who in turn appoint CEOs and other managerial personnel from whom shareholders expect fair rate of
return for their investments which attracts some other new investors for the growth of the company. Ownership and
control have been separated. Directors are also shareholders of the company which shows their interest towards the
returns on investments made by them.

Corporate Governance: In general corporate governance seems to be a document which directs an ethical code of
conduct, whoever deals with the company. But sometimes it levies boundaries for directors and CEOs of the
company for their boundary less services who devote their life for the growth of the company. And their returns in
terms of qualitative and quantitative way are not at all sufficient in relation with their pay package due to regulations
in corporate governance. Efforts and services of BOD, CEOs and other executives may not be valued in accordance
with their accountability, responsibility, and commitment.

Objectives of the study: Our experience with Country Club private limited, Bharti Axa life insurance forced me to
state this point that every director of the company should have direct communication channel either on phone or an
email facility with the shareholder and customer. Now a days this job is given to customer care, call centres who
work with half knowledge and vested interest. We feel there is a gap between ownership and control.
Of course there are some companies who responds immediately say for example Infosys, Wipro, BEL, ISRO,
Aditya Birla, Just dial, and Butterfly, along with below stated companies who work with lot of commitment,
accountability and responsibility. Such companys directors, CEOs and other executives deserve for a pay which we
cannot value in terms of qualitative and quantitative measures.

Scope of the study: Our study is limited to companies specified in the paper. It doesnt mean that BODs and CEOs
of other companies are getting fair returns. In our next paper we try to extend our research work relating to issues
raised in market.

Analysis and Findings: Problems of Board of Directors, CEOs and other Executives: General public have a wrong
notion that one of the peculiar characters of company form of organization is limited liability. To some extent
Directors, CEOs and other executives liability may be covered by insurance schemes of corporations but the degree
of risk taken by the Directors, CEOs on the grounds of criminal and other offences and loss of their health condition
due to stress at work place may continue even after their resignation for the post of director. In case of fraud and
fraudulent representation outside directors such as Independent directors are also held liable for ultra vires actions
made (without their notice) inside the company against Memorandum and Articles of company. In this context to
support our view we would like to mention a few problems for justification. The volume of compensation they

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receive in terms of money and other emoluments.

A few examples below stated are the views expressed by external and internal people.

External Views:

Example 1: If companies can give the minimum guarantee rather than going for investments in real estates or any
other investments shareholders may invest in companies so that with huge investments companies can grow.
Based on the trend of investments by shareholders structure of capital in memorandum of association and
articles as well as company law also can be amended for the sake of economic profits. And moreover fancy
rates of real estates also comes down when public invest in companies. This is indirectly, changes in corporate
governance providing shelter to public through which we can avoid unemployment problems and can help to
the people below poverty line. . Returns from the capital employed in the business operations are greater than
the cost of that capital. For all the above development every individual in nation should follow ethics. Every
individual facing problem in this world to earn more and more money. So to maximise the wealth they
approach some in right way and a few in a different way.
Example 2: May be 30 years back when I went to witness an Annual General Meeting of a Hotel company as a
shareholder, one of the person from among shareholders asked a question to Director Sir I came from
Mumbai (Bombay) and one of my friend (our shareholder also) requested me to get answer for his question
that next year he is going to perform his daughters marriage for which company may give guarantee for
minimum rate dividend. In response to that question director laughed and said they will try for that. And in
next AGM, because it is a hotel company except lunch on the day AGM held company has not declared any
dividend to equity share holders. In those days people were happy because a few of the shareholders cannot
effort food in a five star hotel in normal days who invested their money in that hotel company. Later on that
company has become only VIPs hotel. Whose money has been spent for whom? Whose mistake? Definitely
it is due to loop holes in corporate governance. During any year if company is unable to pay minimum rate of
dividend to equity shareholders such companies must be closed. The rule of perpetual succession need to be
altered and amended.
Internal views
Example 3: Let us try to redesign our corporate governance to obtain economic profits rather than accounting
profit. The difference here is shareholders should get a fair return of dividend (irrespective of economic irregularities)
which is known as economic profit. We have an opportunity to declare dividend in the following ways. Calculation of
fair return
A By reducing salaries paid to CEOs of such companies who fails to pay fair rate of dividend.
B Reduction of PRP (Performance related Pay) below 3% of profit and 10% of Incremental profit.
C By fixing the maximum limit in number of directors in Board

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D Reduction in number of directorships below 12 or 15. (Including internal directors)
Example 4: Thinking outside the box has become ultra vires action which has not been covered under any
corporate governance. Example: Due to companies transfer policy and promotion policy, majority of the employees
were away from their families and provision of company accommodation for such employees and untimely change of
rule before transfer and after transfer disturbed a lot. If, any organization implement thinking outside the box on
experimental basis voice of a few sufferers is to be valued and if possible rectified. It should not be a punishment
transfer of promotion.
Example 5: Corporate governance as well as articles of association needs to be included standing principles regarding
promotions and transfers. In addition to performance based promotions at least 40% promotions shall be made on the
basis of seniority. Knowledge of senior people should not go waste which is an intangible asset for any organization.
Example: An executive from a top company has been ignored to promote for higher post that has completed his post-
graduation from a premier institute and such post has been filled with a person who has completed his graduation
from an ordinary engineering college. Let us alter our corporate governance by giving importance to highly qualified
persons from top ranked intuitions. An underground dada may or may not require the services of a highly qualified
person but organizations at higher level require services of a highly qualified person.
Example 6: Why an executive entered into office premises early morning at 4.30 am?
May be he has some important work for which he came on that day.
Next day again a discussion on the same issue among employees in connection with the entry of an executive at 4.30
am and following day records have been changed about his arrival time. But why? Is it a rumour or real? If it is true
solve the problem from the roots. If it is a rumour find out what was the intention behind that rumour? And acting
accordingly on time is important. If it happened really, concerned director or CEO has to convene a board meeting.
Here board has to face a problem such as if they publicize this issue through public meeting, or through media in
case of theft of financial fraud issue of removal orders of that particular executive, gives meaning in different way
and takes a different shape. Ultimately it reflects in share value in market.
Example 7: We can quote another example why an executive committed suicide may be due to work pressure or
personal problems? A director or a CEO has to solve such problems.
Example 8: Companies transfer policy and promotion policy. Salary and other benefits
Boards constantly face such problems. While some of these are unique to one specific board, others are common
from one board to another.

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Example 9: Meetings and resolutions: Directors are accountable in a general meeting to equity shareholders which
may or may not be possible to solve at AGM. Sometimes discussions may not go as per agenda. Director sometimes
has to convince shareholders who were absent for any previous meeting and may not be satisfied with the rate
dividend declared by board. Settling issues between shareholders and other board members tactfully is a challenging
job for concerned directors. Sometimes he has to advise the specific member of board to speak out the issue raised in
board meeting. Delegation of authority in absence of chairman is another job a director has to execute. Director must
be aware of various decision making techniques. An unresolved issue may be raised by concerned director for
resolution and some require a special notice.
Example 10: Estimations of future risk and measuring cost of risk is a challenging job for any company.
In recent years it was laid down that before retirement any employee approach court for any justice their pension may
be blocked until the matter is settled in court. We know the functioning of judiciary. In such a case union may raise
many disturbances and an unpleasant atmosphere.
Example 11: Recently an issue raised by employees of an IT company regarding leave on Election Day. Different
states have different poling date. Sometimes people from faraway places may not be able to come back within one
day after election.
NOTE: All the examples given in our paper are not related to the companies
specified in our paper.
Some internal problems such as fines imposed on employees, termination of an employee, bad behaviour of workers
within the company and outside the company, absence from duties, cost of turnover of employees, performance
appraisal and performance management systems, feedback systems, recognising key performance areas, employee
minimum wages, compensation rules as per the act, health, safety and welfare measures as per the factories act,
complaints received from outsiders, grievance procedures, high rate of attrition if any, dealing with contract and
casual labourers, travel rules, leave without pay, stealing and threat are some of the internal problems though related
to HR but directors have to frame a good governance based on ethics, morals and values reflecting in the vision and
mission of the company. If companies cannot solve the above issues raised by union indirectly it affects the market
price of shares.
General problems.
Strategies focused on short-term returns,
Long-term strategies.
Governance issues and shareholder scrutiny
Executive compensation,

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Shareholder litigations
Risk management,
Tax strategies,
Changes in audit rules,
Messaging to shareholders and the market,
Board decision-making processes.
Demand the attention of many boards.
Responding to shareholder activism;
proxy advisory firms;
Compensation plans and awards,
accounting requirements;
Managing board communications and processes






Engineers
by
Mike Volker
Website: http://www.sfu.ca/~mvolker/biz/bod.htm

Investors/shareholders are interested regarding dividend payable by the company and its performance in earnings. We
have two methods to measure corporate performance
1. Dividend rate
2. Earnings performance.
Formula for Dividend Rate and Earnings performance
1 Pay-out ratio=cash dividend declared on common stock/Net Income
2 Return on common shareholders equity ratio=Net Income Preferred stock Dividends/Average common
shareholders equity
If Pay-out ratio increases (compared to last year) return on Investment decreases. And vice versa.



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Financial performance in view of shareholders return

year Company name
Jindal steel Sun Net work Apollo Tyres Hero moto corp Cedilla pha Ramco cements
D/P
(%)
ROE(
%)
Mps D/P
(%)
ROE(
%)
Mps D/P
(%)
ROE(
%)
Mps D/P
(%)
ROE(
%)
Mps D/P
(%)
ROE(
%)
Mps D/P
(%)
ROE(
%)
Mps
2009 5.49
29.04
1166 22.54 24.39 306 7.98
20.98 46.13 10.51 33.72 1563 23.09 21.57 568 13.11 28.85 100.95
2010 8.74
21.02
720 52.09 28.16 435 24.04
9.11 69.58 63.39 64.41 1752 20.35 31.03 678 13.48 22.70 109.45
2011 5.12 25.96 599 44.65 32.37 366 10.46 12.71 74.53 70.93 65.22 1882 20.97 29.21 812 14.12 12.16 126.38
2012 6.63 17.59 425 53.89 26.26 338 8.86 13.90 86.93 20.95 55.44 1892 23.36 25.71 736 15.47 18.78 201.18
2013 9.82
11.02
298 54.79 23.62 409 13.35
8.06 128.1 23.93 42.31 1959 30.81 17.13 905 17.71 17.03 231.93
2014 --
11.85
280 -- 25.77 395 --
6.637 165 -- 67.38 2175 -- 20.67 968 -- 11.07 216.00
2015 --
5.13
---- -- 25.85 -- --
4.532 -- -- 68.10 -- -- 19.25 -- -- 8.06 --

D/P: Dividend pay-out ratio in percentage (%) Mps (Rs in crores): Market price per share as on
11th April, 2014
ROE: Return on equity in percentage % (Average of open and closing market price per
share for that year)
Estimated ROE for 2014 and 2015 calculated on the basis of trend values (Y
c
=a+bX) equation of straight line
trend
a = Sum total earnings(Y) divided by Total Number of years (N): b = sum total of earnings multiplied with deviations
(XY) divided by sum total of square of deviations (X2)(deviations from year (2011) square of deviations taken)
Contd.
year Company name
Bharathi airtel Torrent power Gujarat fluro chemica Ambuja Cements Larsen and toubro Reliance Industries
D/P
(%)
ROE(
%)
Mps D/P
(%)
ROE(
%)
Mps D/P
(%)
ROE(
%)
Mps D/P
(%)
ROE(
%)
Mps D/P
(%)
ROE(
%)
Mps D/P
(%)
ROE(
%)
Mps
2009 4.90
28.01
533 23.17 12.61 193.8 9.65
15.96 102.3 26.87 26.71 100.5 17.66 27.94 1255 12.39 12.11 1440
2010 4.03
25.66
656 16.94 21.12 277.2 11.30
27.64 262.9 51.13 17.31 134.2 17.20 23.89 1633 12.84 11.84 1041
2011 4.92 17.49 359 24.38 22.26 224.5 11.51 21.86 440.5 39.67 18.43 165.2 22.31 18.12 867 11.76 13.39 867
2012 6.63 11.59 301 24.82 21.53 171 14.58 15.09 379.9 53.08 14.37 162.5 22.67 17.67 1296 12.63 12.07 759
2013 7.45
9.41
318 24.55 6.32 118.1 8.91
20.15 308.7 51.40 14.00 194.4 23.18 16.85 1392 12.51 11.67 859
2014 --
3.05
322 -- 13.12 106.2 --
18.89 303.2 -- 9.66 217.2 -- 13.13 1298 -- 12.11 953
2015 --
-2.07 -- -- 11.90 -- -- 18.47 -- -- 6.82 -- -- 9.21 -- -- 12.07 --



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D/P: Dividend pay-out ratio in percentage (%) Mps (Rs in crores): Market price per share as on
11
th
April, 2014
ROE: Return on equity in percentage % (Average of open and closing market price per
share for that year)
ROE for 2014 and 2015 calculated on the basis of trend values (Y
c
=a+bX)
a = Sum total earnings(Y) divided by Total Number of years (N): b = sum total of earnings multiplied with deviations
(XY) divided by sum total of square of deviations (X2)(deviations from year (2011) square of deviations taken)
Interpretation
From the above table of twelve sample companies pay-out ratio of return on equity and market price of the share, it
can analysed that few follow a stable dividend policy in terms of pay-out ratio whose return on equity was also stable,
where as if the pay-out ratio increases and return on equity declines or vice versa, we can say that the company has
sufficient new investment opportunities which can be used as internal equity to increase the return on equity,
otherwise it is better to distribute the profit to keep shareholders happy. Hence it can be concluded that corporate
performance can directly influence how policy makers take care of their shareholders wealth to keep stable growth in
their market price.
Suggestions: Working with an inefficient manager creates lot of problems. The real problem is corruption, misuse
of funds and vested interest. It needs good governance which comes from participation of public, shareholders and
their decision making, from planning to implementation. There are certain questions aroused in the minds of
company insiders and outsiders. Our intention is to bring some awareness among general public who are under
wrong impression that, directors, CEOs and other executives are held responsible for the above mentioned
problems, allegations, grievances, offences and liabilities created by external and internal people. A concept of
ethical code of conduct, avoidance of economic irregularities, global competition, avoiding third party involvement in
between shareholder and directors of the company are some of the factors helps us to regain our investments which
has been shown in a tabular form.


Let us not have an assumption that earnings retained are always used for growth of organizations.




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Additional information
Sl.No Company Particulars 2013
Cr Rs
2012
Cr Rs
2011
Cr Rs
2010
Cr Rs
2009
Cr Rs
CEO Pay package
(Cr)Rs
1 Jindal steel
Reported net profit 1,492.45 2,100.45 2,544.10 1,444.68 1,554.23
69.76 Cr. PA

2 Equity Dividend 146.51 139.25 130.23 126.32 85.33
3
Book Value (Rs) 131.18 111.12 83.21 82.25 385.26

4
Net worth 13,540.18 11,940.54 9,799.53 6,874.01 5,351.22

5
Dividends Pay-out ratio% 9.82 6.63 5.12 8.74 5.49

6 Average
earnings
Return on common shareholders
equity ratio %
11.71 19.32 15.25 17.32 --


Based on the above data there may be an increase in dividend pay-out ratio and corresponding ROI decreasing.
Means company is willing to pay more dividends in 2014. Doesnt mean that low pay-out ratio is an indication for
low rate of dividends. A low ratio is an indication that company is retaining earnings for future growth. But at the
same time shareholders should find out the reasons for low rate of dividends are paid by the company. Performance
through earnings means profitability. In the above table return on common shareholders equity decreased in 2013
when compared to 2012. During growth it is difficult for any company for high return.
2 Rs in crores
Sl.No Company Particulars 2013 2012 2011 2010 2009 CEO pay package
1 Sun Net work Reported Net Profit 683.34 694.65 772.22 567.38 437.11 37.08 Cr
2 Equity Dividend 374.39 374.38 344.82 295.56 98.52
3 Equity Dividend (%) 190.00 190.00 175.00 150.00 50.00
4 Book Value (Rs) 73.41 67.12 60.54 51.13 45.49
5 Net worth 2,892.85 2,645.24 2,385.71 2,015.01 1,792.51
6 Dividends pay-out ratio 54.79 53.89 44.65 52.09 22.54
7 Average
earnings
Return on common
shareholders equity ratio
24.68 27.62 35.10 29.80


3 Rs in Crores
Sl.No Company Particulars 2013 2012 2011 2010 2009 CEO pay package
1 Apollo
Tyres
Reported Net Profit 312.53 181.33 198.25 414.99 108.12
48.19 Crores
2 Equity Dividend 25.20 25.20 25.20 37.80 22.68
3 Equity Dividend (%) 50.00 50.00 50.00 75.00 45.00
4 Book Value (Rs) 46.24 40.56 37.55 34.19 26.84
5 Net worth 2,341.43 2,047.60 1,895.56 1,726.60 1,355.71
6 Dividends
pay-out ratio%
8.06 13.90 12.71 9.11 20.98

7 Average
earnings
Return on common
shareholders equity
ratio%
14.24 9.20 10.95 26.92

2013 data indicates low rate of pay -out ratio means that the company is retaining its earnings. But during 2012 pay-
out ratio is more than the ROI means company declared more dividends.



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4 Rs in Crores
Sl.No Company Particulars 2013 2012 2011 2010 2009 CEO pay package
1 Hero moto
corp
Reported Net
Profit
2,118.18 2,378.13 1,927.90 2,231.83 1,281.76
59.53 Cr.
2 Equity Dividend 1,198.13 898.59 2,096.72 2,196.56 399.38
3 Equity Dividend
(%)
3,000.00 2,250.00 5,250.00 5,500.00 1,000.00

4 Book Value (Rs) 250.70 214.83 148.03 173.52 190.33
5 Net worth 5,006.24 4,289.83 2,956.06 3,465.02 3,800.75
6 Dividend pay-
out ratio%
56.56 37.79 108.76 98.42 31.16

7 Average
Earnings
Return on
common
shareholders
equity ratio%
45.57 65.64 60.05 35.28


During 2013 pay- out ratio is more than the ROI means company declared more dividends. During 2012 ROI is more
than the pay-out ratio means company has retained earnings for growth purposes. During 2011 and 2010 company
declared dividends more than the ROI. So we can expect high pay -out ratio during 2014 and 2015.
5 Rs in crores
Sl.No Company Particulars 2013 2012 2011 2010 2009 CEO pay
1 Cadila
Health care
Reported Net
Profit
498.60 657.50 610.40 503.30 265.90
28.63 Cr. PA
2 Equity
Dividend
153.60 153.60 128.00 102.40 61.40

3 Equity
Dividend (%)
150.00 150.00 125.00 100.00 90.00

4 Book Value
(Rs)
142.20 124.89 102.07 118.84 90.32

5 Net worth 2,911.50 2,557.10 2,089.90 1,622.10 1,232.80
6 Dividend pay-
out ratio%
30.81 23.36 20.97 20.35 23.09

7 Average ROE% 18.24 28.30 32.89 35.26

6 Rs in crores
Sl.No Company Particulars 2013 2012 2011 2010 2009 CEO pay package(Cr)
1 Ramco
cements
Reported Net
Profit
403.65 385.11 210.98 353.68 363.52
51.51
2 Equity
Dividend
71.49 59.58 29.79 47.66 47.66

3 Equity
Dividend (%)
300.00 250.00 125.00 200.00 200.00

4 Book Value
(Rs)
99.62 86.16 72.89 65.48 52.96

5 Networth 2,370.76 2,050.38 1,734.51 1,558.16 1,260.20
6 Dividend pay
ratio%
17.71 15.47 14.11 13.47 13.11

7 Average ROE% 18.25 20.35 12.81 25.1




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7 Rs in crores
Sl.No Company Particulars 2013 2012 2011 2010 2009 CEO Pay Package Cr
1 Bharti Airtel Reported Net
Profit
5,096.30 5,730.00 7,716.90 9,426.15 7,743.84
23.49 (crores)
2 Equity
Dividend
379.80 379.80 379.80 379.79 379.65

3 Equity
Dividend (%)
20.00 20.00 20.00 20.00 20.00

4 Book Value
(Rs)
142.58 130.16 116.16 96.24 145.01

5 Net worth 54,146.20 49,429.60 44,111.60 36,737.18 27,643.97
6 Dividend
pay-out
ratio%
7.45 6.63 4.92 4.03 4.90

7 Average ROE% 9.84 12.25 19.08 29.28


8 Rs in crores
Sl.No Company Particulars 2013 2012 2011 2010 2009 CEO Pay package
1 Torrent
power
Reported Net
Profit
384.96 1,237.46 1,065.72 836.55 407.89
39.01 (crores)
2 Equity
Dividend
94.49 307.08 259.85 141.73 94.49

3 Equity
Dividend (%)
20.00 65.00 55.00 30.00 20.00

4 Book Value
(Rs)
128.91 121.66 101.33 83.82 68.4

5 Net worth 6,090.29 5,747.88 4,787.13 3,960.15 3,233.40
6 Dividend
pay-out
ratio%
24.54 24.81 24.38 16.94 23.16

7 Average ROE% 6.50 23.49 24.36 23.25


9 Rs in crores
Sl.No Company Particulars 2013 2012 2011 2010 2009 CEO pay package
1 Gujarat fluro
chemicals
Reported Net
Profit
398.34 431.60 263.63 334.15 340.14
37.80 Crores
2 Preference
Dividend
0.00 0.00 0.00 0.00 0.00

3 Equity Dividend 38.45 38.45 38.45 38.45 38.45
4 Equity Dividend
(%)
350.00 350.00 350.00 350.00 350.00

5 Book Value (Rs) 227.15 194.97 159.05 139.13 112.05
6 Net worth 2,495.26 2,141.77 1,747.22 1,528.32 1,230.83
7 Dividend pay-out
ratio%
9.65 8.90 14.58 11.50 11.30

8 Average
earnings
ROE% 17.18 22.19 16.09 24.22



10 Rs in crores

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Sl.No Company Particulars 2013 2012 2011 2010 2009 CEO pay package
1 Ambuja
Cements
Reported Net Profit 1,095.76 1,061.19 1,325.26 1,120.01 1,606.73
26.02 Crores
2 Preference Dividend 0.00 0.00 0.00 0.00 0.00
3 Equity Dividend 563.24 563.24 525.69 572.63 431.76
4 Equity Dividend (%) 300.00 300.00 280.00 305.00 230.00
5 Book Value (Rs) 416.78 393.23 383.09 344.59 320.45
6 Net worth 7,824.84 7,382.80 7,192.27 6,469.49 6,016.22
7 Dividend pay-out
ratio%
51.4 53.07 39.66 51.12 26.87

8 Average ROE% 14.94 14.56 19.40 17.94

11 Rs in crores
Sl.No Company Particulars 2013 2012 2011 2010 2009 CEO pay package
1 Larsen and
toubro
Reported Net Profit 4,910.65 4,456.50 3,957.89 4,375.52 3,481.66
26.11 crores
2 Preference Dividend 0.00 0.00 0.00 0.00 0.00
3 Equity Dividend 1,138.47 1,010.46 882.84 752.75 614.97
4 Equity Dividend (%) 925.00 825.00 725.00 625.00 525.00
5 Book Value (Rs) 473.57 411.87 358.81 303.28 212.32
6 Net worth 29,142.72 25,223.02 21,846.26 18,311.64 12,459.69
7 Dividend pay-
ratio%
23.18 22.67 22.30 17.20 17.66

8 Average ROE% 18.06 18.93 19.71 28.43


12
Sl
No
Company Particulars 2013 2012 2011 2010 2009 CEO pay package
1 Reliance
Industries
Reported Net Profit 21,003.00 20,040.00 20,286.30 16,235.67 15,309.32
19.64 crores
2 Preference Dividend 0.00 0.00 0.00 0.00 0.00
3 Equity Dividend 2,628.00 2,531.00 2,384.99 2,084.67 1,897.05
4 Equity Dividend (%) 90.00 85.00 80.00 70.00 130.00
5 Book Value (Rs) 557.49 498.21 446.25 392.51 727.66
6 Net worth 180,020.00 166,096.00 151,540.32 137,170.61 126,372.97
7 Dividend pay-out
ratio%
12.51 12.62 11.75 12.84 12.39

8 Average ROE% 12.13 12.61 14.05 12.32



13
Sl.No Company Particulars 2013 2012 2011 2010 2009 CEO pay package
1 ICICI Total 15,379.70 11,483.44 8,615.76 6,834.54 6,193.87 1 crore
2 Preference Dividend 0.00 0.00 0.00 0.00 0.00
3 Equity Dividend 2,307.23 1,902.04 1,612.58 1,337.86 1,224.58
4 Equity Dividend (%) 200.00 165.00 140.00 120.00 110.00
5 Book Value (Rs) 578.65 524.01 478.31 463.01 444.94
6 Net Worth 66,705.96 60,405.25 55,090.93 51,618.37 49,883.02
7 Dividend pay-out ratio% 15.00 16.56 18.71 19.57 19.77
8 Average ROE% 24.19 19.88 16.14 13.46

Page 14 of 15


14
Sl.No Company Particulars
2013
2012 2011 2010 2009
1 Wipro

Reported Net Profit 5,650.20 4,685.10 4,843.70 4,898.00 2,973.80

2 Preference Dividend 0.00 0.00 0.00 0.00 0.00
3 Equity Dividend 1,724.70 1,475.20 1,472.60 880.90 586.00
4 Equity Dividend (%) 350.00 300.00 300.00 300.00 200.00
5 Book Value (Rs) 98.38 99.04 86.86 120.49 85.42
6 Net worth 24,229.50 24,352.50 21,320.20 17,692.20 12,515.00
7
Dividend pay-out ratio%

30.52

31.48

30.40
17.98 19.70

8 Average
ROE%

23.26
20.51

24.83
32.42



Conclusion
Trusting is most important factor for the growth and development of the company. A healthy person can
earn and work for the accomplishment of organizational objectives. A positive thinker can maintain good
health. As long as he or she is healthy, this leads to increase in wealth. Such increase in wealth motivates
workers/employees/executives/individuals/job seekers towards positive thinking. Positive thinking is always
good for health. Positive thinking is one of the ethical factors. So ethical behaviour is must for long term
prosperity of a company. Trusting each other (employer and employee) is important and another ethical
factor.










Page 15 of 15

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Salaries.com
Magazine:
Business India
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The Hindu
Times of India