Sunil Mittal, the new president of the Confederation of Indian Industry, can stand up to the prime minister's tirade on CEO compensation, as he has done, because his numbers back him.

Bharti Airtel, the telecom service provider he controls and manages, delivered over 100 per cent rise in profit in the last financial year. Its shareholders are unlikely to grudge him the 78 per cent hike in salary for 2005-06.

However, if you look elsewhere, the story -- to borrow from Carroll's Alice -- gets curiouser and curiouser.

Rajiv Bajaj is the managing director of Bajaj Auto and chairman Rahul Bajaj's son. He is credited with reinventing and reviving the company. Fittingly, he received a 362 per cent rise in salary to take it to a little over Rs 2 crore (Rs 20 million) for 2005-06.

Yet, his pay pales in comparison with that of Pawan Kant Munjal, the managing director of Hero Honda and also the chairman's son. Hero Honda, the world's largest two-wheeler maker, reported a decline in net profit for 2006-07.

Tata Steel, under its busy managing director B Muthuraman, has just made the biggest ever acquisition by an Indian company and reported decent results.

However, the highest paid in the steel industry is Naveen Jindal, the managing director of Jindal Steel and Power, who is also the scion of the promoter family.

Jindal's 2005-06 salary rose by a massive 248 per cent to Rs 13.54 crore (Rs 135 million), over six times Muthuraman's.
 

SALARIES AT THE TOP Do CEOs earn their salaries?
Name	Designation	Annual pay* (Rs crore)	Salary hike (%)	Co's sales growth (%)	Co's profit growth (%)
Sunil Bharti Mittal	CMD, Bharti Airtel	12.68	78.34	58.47	100.45
Pawan Kant Munjal	MD, Hero Honda	15.22	15.74	13.61	-11.68
Rajiv Bajaj	MD, Bajaj Auto	2.08	362.20	24.16	10.13
Naveen Jindal	EVP and MD, Jindal Steel	13.54	248.00	36.00	23.00
B Muthuraman	MD, Tata Steel	2.20	13.40	15.36	20.41
K V Kamath	MD and CEO, ICICI Bank	2.48	35.51	60.73	22.45
Aditya Puri	MD, HDFC Bank	1.28	-1.50	53.93	31.08
Pankaj R Patel	CMD, Cadila Healthcare	9.93	32.40	13.47	24.14
Malvinder Mohan Singh	CEO, Ranbaxy	2.62	-2.23	15.13	70.11
Azim Premji	CMD, Wipro	2.53	-1.93	33.49	40.66
Gajendra Patni	ED, Patni Computer	2.00	26.58	13.96	5.84
Notes: The payments are according to the 2005-06 annual report;  The sales and profit growth figures are for 2006-07

"Shareholder activism in India is not what it is in the US. Promoter CEOs are the ones that take huge compensation, though the gap with professionals is narrowing. The board also consists of people who wouldn't say anything against the CEO. These are imbalances that will be corrected as shareholders and the board become more powerful," says K Sudarshan, managing partner with global executive search firm EMA Partners.

Interestingly, Ranbaxy CEO Malvinder Mohan Singh and Wipro chief Azim Premji took salary cuts for 2005-06. At least Premji sits on a huge pile of Wipro equity.

But Singh, who controls a far smaller stake in Ranbaxy, actually makes much less than Pankaj R Patel, the chairman & MD of Cadila Healthcare. Both Ranbaxy and Wipro reported sterling performances for 2006-07.

N S Rajan, the head of human resources practice with consultancy firm Ernst & Young says a CEO's performance cannot be measured by numbers alone. One must take into account the long-term value created.

Amit Mitra, the secretary-general of industry body Federation of Indian Chambers of Commerce and Industry, says that eventually the CEO's pay will be determined by the market.

"You can link CEO pay to anything, but it has to be decided by the market. If it is lower than the market standard, the fellow will walk."