INTRODUCTION:

An organization is formed to accomplish a specific mission. To do this, it must attract and hire people who have certain knowledge, skills, aptitude, and attitude. To attract and retain such people, the organization provides rewards. An organization designs and implements a reward system to focus workers’ attention on the specific behaviors the organization considers necessary to achieve its desired objectives and goals. The behavior ranges from simply arriving at work at the scheduled time to meeting specified performance standards and providing innovative contributions that lead to improved productivity. The compensation system results from the allocation, conversion and transfer of a portion of the income of an organization to its employees for their monetary and in kind claims on goods and services.

Compensation may be defined as money received in the performance of work, plus the many kinds of benefits and services that organizations provide to their employees. Compensation includes direct compensation (gross pay) and indirect compensation (may consists of life and health, accident, insurance, the employee contribution to retirement, pay for vacation or illness, and payment for welfare as social security). Compensation refers to a wide range of financial and non-financial rewards to employees for their services rendered to the organization. Compensation also includes non-monetary rewards.

In the United States, something apparently “magical and absolutely truthful” is happening when one party says to another “This is the market rate for this job”. After all, the US is the paragon of the capitalist, free enterprise system. Market forces drive free enterprise.

Thus, when some wishes to justify a rate of pay and does an analysis of the market to come up with a market rate of pay, all other pieces of pay-related data became, in reality, practically worthless. In the market driven US economy, the so-called untainted, impossible-to-manipulate market provides accurate and untarnished data. At least, this is the impression people who want to justify specific pay action wish to promote.

Just as skill, effort, responsibility and working conditions have been used historically to differentiate rates of pay among major job groupings, surveys have been used to determine a specific rate of pay for a particular incumbent/jobholder. Also, because so many problems arise in defining the factors of skill, effort, responsibility and working conditions and even more critical issues are related to developing scales for measuring differences within these factors, it is difficult to perform job evaluation-job-worth-exercises-in an objective manner. Because factor-based job evaluation methods have potentially strong roots in subjectivity, using the “objective” market for determining rates of pay is much more palatable, more acceptable and easier and less costly.

EXECUTIVE COMPENSATION:

In 2001 and 2002, executive compensation became an issue in the wake of financial and accounting scandals that involved such major companies as Enron, WorldCom, Global Crossing, Tyco and Adelphia. American financial markets suffered a severe decline. In preparing the financial statements of these companies, accountants inflated revenue by failing to recognize significant amount of the compensation of the top executives of some of these companies was committed to stock options, the inflated value of stock enriched them exorbitantly. When these companies faced severe financial difficulties and in some cases, entered into the illegal inflation of revenue and the huge compensation packages received by executives in these companies.

In defense of executive compensation packages, top management, member of the board of directors who approve these packages, highly specialized consultants who design the packages and many writers who preview the performance of US organizations uniformly state that these components are needed and useful to attract and retain management personnel of outstanding ability and to encourage excellence in the performance of individual responsibility. They state that these awards recognize the ability, efficiency and loyalty of these executives, whose efforts contribute to the success of the organization.

Those who claim that the kind and size of compensation granted to US executives are not out of line in comparison with pay provided to top-of-the line professionals and entertainers have a valid point. It must be recognized that, historically, leaders of society always have had first claim to all things considered valuable by the other members of society. The top one percent received the dominant share of the riches and the remainder received an executives share. So, writers and others who cry “greed” and hold in contempt the executives who are receiving huge compensation packages must realize that there is nothing new.

THE DEBATE:

The debate over executive compensation is hardly new. In the U.S.A, it has been on for decades, and was reignited recently when it emerged that Home Depot’s unsuccessful CEO, Bob Nardelli would be walking out with $ 210 million as part of his golden handshake. With new industries and business taking off, the war for top management talents has pushed CEO salaries to record levels. But the fact is, not every CEO is getting paid obscenely and certainly not as much as what some CEO’s in the US take home. We give here some finding and trends of a study on “Best Compensation Management Strategies” conducted by Synergy Consultant. It provides good insight into various aspects of compensation issue:

The information technology companies have their strategy to be amongst the top 25% pay master in their region of operation; this is primarily because of their fear that competent talent in adequate number is not available for the skill-sets needed by them. Same is the case in the telecom sector. The compensation, offered to fresh MBAs, as compared to fresh engineers is much higher, except in the IT sector where engineers get better pay packages than MBAs. The salary increase has come down in the incremental level in 2002 from 2000 in all sectors. The highest compensation sectors for all three levels, i.e. junior management level, middle management level (5-10 years of experience) and senior management level are distributed in following five industries:-

1) FMCG

2) IT

3) Telecom

4) Engineering

5) Durables

The trend of compensation at senior management level across industries varies greatly but the minimum pattern is almost similar. Higher compensation/rewards at higher echelons of management are given as critical strategies senior positions are not easily available.

CONTROVERSY ABOUT CEO’S COMPENSATION

Top management’s remuneration has ballooned sharply raising the key question whether the shareholders and companies have been adequately rewarded with increase in pay of CEO? There have been controversies in USA, where some top executives in corporations appears to be exceeding the few million-dollar mark. If we compare the top executive’s total compensation with performance, we get mixed results, some high paid executives performed better than other. If we take a past case of Lee Iacocca, his contribution in rebuilding of the Chrysler Corporation, and saving it from bankruptcy was tremendous feat. New Chrysler Corporation has justified every penny he had earned. Louis Gerstner’s, who retired as CEO of IBM grossed $ 127 million which works out to about Rs. 600 crores more than the turnover of some of India’s bigger firms.

THE INDIAN SCENARIO:

The following table revels the names of top drawers of gross annual salary of Indian CEOs during the period 2001-02

Executive

Annual Salary

(in Rs. Crore)

Vivek Paul, WIPRO

M.S.Banga, HLL

P.S.Pal, WIPRO

K.W.Kamath, ICICI

Lalita D.Gupta, ICICI

4.6

1.6

1.5

1.3

In India, the situation is nowhere as obscene. Yet, the fact that government thinks CEO pay may be out of control puts the subject at centre stage. On May 24, 2007 when Prime Minister of India, Man Mohan Singh arrived at industry association CII’s conference in Delhi to “share his thoughts” on Inclusive Growth-Challenges for Corporate India, it was a virtual rap on the knuckles that he delivered to the who’s who of India Inc. gathered there to hear his speech. Delivered with earnestness, the speech set out to talk about a 10-point social charter for inclusive growth that could be the result of a “new partnership” with industry. After dwelling on issues such as caring for workers, corporate social responsibility and employment for the less privileged he urged the industry to resist, “excessive remuneration to promoters and senior executives and discourage conspicuous consumption. In a country with extreme poverty, industry needs to be moderate in the emolument level it adapts. Rising income and wealth inequalities, if not matched by a corresponding rise (in) income across the nation, can lead to social unrest. An area of great concern is the level of ostentatious expenditure on wedding and other family events. Such vulgarity insults the poverty of the less privileged; it is socially wasteful and it plants seeds of resentment in the minds of the have-nots.”

The Prime Minister’s advice to industry does not make a case for greater governmental control over executive pay, feels the Ministry of Corporate Affairs, which is revamping India’s company law. Instead, the ministry would go ahead with its plan to scrap the existing cap on managerial remuneration and leave decisions regarding pay hike to shareholders. This would mean that shareholders could decide on a higher managerial remuneration than what is possibly today, if they feel that the candidate deserves. Currently, government approval is needed for any public company to raise the remuneration of a director to above 5% of the company’s net profit and for all directors, 10% of the net profit. The new company law is likely to remove this cap as well as the need for government approval and leave it to a special resolution of the shareholders to decide managerial remuneration. This has been proposed to retain and attract talent at higher managerial level. Certain issues which come out of the recent controversy are as below:

§ Should the government control the Executive Compensation?

§ Can there be a huge gap between the compensation of top executives of Public and Private sectors?

§ Should the executive compensation be linked to the profitability of the organization?

BEHIND THE STORY:

Expectedly, there is a story behind rising CEO salaries, and the story is one of an economy expanding at a furious pace. Indian and foreign investors are scrambling to get into new sunrise sectors such as retail, infrastructure and real state but not finding enough CEOs to run those businesses. Says Amit Mitra, Secretary General of FICCI: “Several of the new industries are hungry for talent across management level. But there is an acute shortage of managers who can lead companies in these and other, industries.” Therefore, when Reliance’s Ambani embarked on his mega retail plan, he didn’t mind throwing unheard-of money at the professionals he wanted to win over. Thanks to Ambani, the million-dollar pay cheque became an Indian phenomenon. Some of his retail heads such as Raghu Pillai were said to be hired at fantastic salaries that touched or topped $ 1 million.

“Salary” levels have increased on account of scarcity of resources. There is a visible shortage of human capital. Fundamentally, there is a demand-supply mismatch. The shortage is particularly acute in the sectors that are just opening up. Infrastructure, for example, there are two major airports revamps happening in Delhi and Mumbai and neither of the investors has been able to find an appropriate CEO so far. Why should find a CEO for an airport project be so difficult? Simply because few CEOs in India have set up an airport from scratch and fewer still have the unique skills that the job demands. The air side of an airport, for instance, is all engineering and technical stuff while the land side, which houses retail business, demands a good marketer.

The overall boom in business has driven up salaries down the line as well. According to the Business today-Omam Consultants salary surveys for junior to senior managers, salaries have been rising at anything upward of 15 percent year-on-year. While the gap between the CEO’s salary and a young executive’s can be quite wide. Mercer data shows that a sales trainee in 2006 entered the job at Rs. 2, 66,169 a year compared to Rs. 2, 00,966 the year before. An assistant buyer in a purchase department made 35 percent more equally better off, getting a 33 percent over 2005. At the general manager level the hike was more than 50 percent, with the total annual compensation going up from Rs. 74.70 lakhs to Rs. 1.12 crores.

OBJECTIVES OF THE STUDY:

The study aims to achieve the following objectives:

1. To examine the proportional raise in CEOs salary in the last decade.

2. To study the nature and pattern of salary of Promoter CEOs and Professional CEOs of major industry sector.

3. To ascertain the difference between salaries of Public sector CEOs and Private sector CEOs.

4. To evaluate the functional relationship between company profits and the salaries drawn by CEOs.

REVIEW OF LITERATURE:

Kevin J. Murphy and Tatiana Sandino (2009) finds marginally significant evidence in the U.S. that "CEO pay is higher in companies where the compensation consultants offer other services, and that CEO pay increases with the count of other services provided by the consultants." Finds evidence that CEO pay is actually about 7% higher, not lower, in U.S. companies where the consultant works exclusively for the compensation committee rather than for management.

Christopher S. Armstrong and Christopher D. Ittner (2008) finds that, "after using propensity scoring methods to match companies on both economic and governance characteristics, we find no significant difference in pay levels…between firms that use and do not use compensation consultants. These results provide the first evidence that the higher pay found in consulting clients is largely due to differences in corporate governance, rather than to the simple use or non-use of consultants."

In attempting to fill this gap, the study by Kannan Ramaswamy, Rajaram Veliyath, Lenn Gomes (2000), set in India, examines whether factors such as the spread of family controlled conglomerates and governmental involvement in private business have an impact on the way in which top executives are compensated. It provides the first evidence of the important role of family and government ownership in corporate governance and CEO compensation.

Arijit Ghosh (2006) examines the effect of corporate governance, firm performance, and corporate diversification on the board, as well as CEO compensation and its components, in the context of an emerging economy-India-where a managerial market has yet to develop.

Saritha Rai (2009) stated that the call has come at a time when investors in the United States and elsewhere are outraged over the multi-million dollar bonuses and fat pay checks of corporate executives.

HYPOTHESIS:

Based on the review of literature the following hypotheses were framed:

Hypothesis 1

Ho1: μ1 = μ2 There is significant difference in the salary of Promotor CEOs and Professional CEOs

Ha1: μ1 > μ2 The Promotor CEOs make much more salary than Professional CEOs

Hypothesis 2

Ho2: P = O There is no linkage (correlation) between profit and salary of CEOs of the companies

Ha2: P ≠ O There is linkage (correlation) between profit and salary of CEOs of the companies

Hypothesis 3

Ho3: μ1 = μ2 There is no significant difference in the salary of Public Sector CEOs and Private Sector CEOs.

Ha3: μ1 ≠ μ2 There is significant difference in the salary of Public Sector CEOs and Private Sector CEOs.

RESEARCH METHODOLOGY:

In order to attain the objectives, CEOs of top 30 companies listed in BSE 100 as on March 31, 2008 were selected. These companies happen to be from five major industry sectors viz. FMCG, IT, Telecom, Engineering and Durables. The analysis is based on the data collected from secondary sources: CMIE India, BSE Directory, wage and salary surveys, company annual reports, trade journals and company websites. The data collected through various sources was converted into readable data and was tabulated and analyzed for logical status using appropriate statistical methods. In this study statistical tool such as mean, standard deviation and correlation coefficient was used. Necessary hypothesis were framed and analyzed through t-test as per the case.

RESULT AND DISCUSSIONS:

The results were evaluated based on the data of Promoter Vs Professional CEOs salary given in Table 1; the company’s profit figure Vs respective CEOs salary given in Table 2 and, Public sector Vs Private sector CEOs salary given in Table 3. In independent samples t-test (one tailed) was used in Table 1 to examine the CEOs salary difference. In Table 2, t-test for significance of an observed sample correlation coefficient (two tailed) was used to determine the linkage and in Table 3, t-test (two tailed) was used to find out significant difference in Public and Private sector CEOs salary. The result generated and related discussion is presented below:

TABLE-1 : Promoter Vs Professional CEO salary

S. No	Promoter CEOs	Salary	Professional CEOs	Salary
S. No	Promoter CEOs	(in Rs. crore)	Professional CEOs	(in Rs. crore)
1	Anil Ambani	48.01	A.M.Naik	8.39
2	Mukesh Ambani	44.02	D.Bhattacharya	8.24
3	Kumar Mangalam Birla	20.14	Martial G.Rolland	5.31
4	Malvinder Mohan Singh	19.59	Douglas Baillie	4.92
5	Sunil Bharti Mittal	19.55	Y.C.Deveshwar	4.8
6	Sajjan Jindal	16.73	Raymond Bickson	4.55
7	Brijmohan Lall Munjal	15.76	Sanjeev Aga	4.06
8	B. K Goenka	15.1	J.Schubert	4.01
9	Rohtas Goel	13.43	Deepak Parekh	3.74
10	Kamal K. Singh	10.93	S.Ramadorai	3.37
11	K P Singh	8.02	Jagdish Khattar	3.25
12	Y.K.Hamid	7.89	Ravi Kant	3.18
13	K.Anji Reddy	6.62	B.Muthuraman	2.82
14	Rahul Bajaj	3.81	K.V.Kamath	2.79
15	Atul Punj	3.71	Aditya Puri	2.38
16	Ratan Tata	3.65	P.T.Siganporia	1.71
17	Anand Mahindra	2.28	P.R.Menon	1.47
18	Shishir Bajaj	2.23	Ravi Uppal	1.45
19	Uday Kotak	1.53	Pravin Kadle	1.34
20	Azim Premji	1.31	Bhaskar Bhat	1.31
MEAN		13.2155	MEAN	3.6545
SD		12.9851	SD	2.0263

TABLE 2 : Company’s Profit Vs CEOs Salary

SR. NO.	COMPANY	PROFIT (2008-09)	CHAIRMAN/CEO	SALARY(2008-09)
1.	Reliance Industries	15309	Mukesh Ambani	44.02
2.	Hindalco Industries	2230	Kumar Mangalam	20.14
3.	Ranbaxy Labs	-1045	Malvinder M. Singh	19.59
4.	Bharti Airtel	7744	Sunil Mittal	19.55
5.	JSW Steel	459	Sajjan Jindal	16.73
6.	Hero Honda	1282	B.L.Munjal	15.76
7.	India Cements	429	N.Srinivasan	12.14
8.	Rolta India	263	Kamal K Singh	10.93
9.	EIH	170	P R S Oberoi	9.15
10.	L & T	3482	A.M.Naik	8.39
11.	DLF	1578	K P Singh	8.02
12.	Cipla	777	Y.K.Hamied	7.89
13.	Dr. Reddy’s Labs	561	K.Anji Reddy	6.62
14.	ITC	3268	Y.C.Deveshwar	4.80
15.	Indian Hotels	234	Raymond Bickson	4.55
16.	Siemens	593	J.Schubert	4.01
17.	Bajaj Auto	655	Rahul Bajaj	3.81
18.	Financial Technologies	369	Jignesh Shah	3.44
19.	Maruti Udyog	1219	Jagdish khattar	3.25
20.	Tata steel	5202	B.Muthuraman	2.82
21.	ICICI Bank	3758	K.V.Kamath	2.79
22.	HDFC Bank	2245	Aditya Puri	2.38
23.	Mahindra & Mahindra	841	Anand Mahindra	2.28
24.	Axis Bank	1815	P.J.Nayak	2.13
25.	Kotak Mahindra Bank	276	Uday Kotak	1.53
26.	Tata Power	922	P.R.Menon	1.47
27.	ABB	547	Ravi Uppal	1.45
28.	Exide Industries	284	T V Ramanathan	1.42
29.	Wipro	2974	Azim Premji	1.31
30.	Sun Pharma	1269	Dilip Shanghvi	1.13
MEAN		1990.3333	MEAN	8.1167
SD		3075.7700	SD	9.0834

Result: There is linkage (correlation) between profit and salary of CEOs of the companies. [ t cal = 4.5182, t tab = 2.0484, at α .05] between profit earned by company (Mean = 1990.3333, SD = 3075.7700) and CEOs salary (Mean = 8.1167, SD = 9.0834). Since t cal > t tab hence null hypothesis Ho2 was rejected.

Discussion: Studies reveal that US CEO earns just 16 percent of their Total Direct Compensation through guaranteed salary; the rest is “at risk” and is earned through annual bonuses and Long Term Incentives (including equity pay). In India, the proportion of pay at risk is much lower and ranges between 25-50 percent, though this number has been growing. Institutional shareholder groups in the US have compulsory stock ownership guidelines for CEOs and their direct reports, where a value equal to a multiple of compensation needs to be held in stock of the company. This is considered necessary as a sign of commitment and ownership of the company’s well being. We could look at adopting norms similar to this as a pre-requisite to institutional investment. Besides, Boards and Remuneration committees need to play a greater role to ensure pay is indeed commensurate with affordability and performance. Several elements of CEO pay such as value of stock grants, contribution to retirement benefits are rarely included while computing total pay. This is a great opportunity for India Inc. to set norms that will place it at par with the rest of the world on disclosure.

TABLE 3 : CEOs Salary in Public Vs Private Sector

Sr. No.	PUBLIC SECTOR CEO	Salary (in Rs. crore)	PRIVATE SECTOR CEO	Salary (in R. crore)
1.	J.Schubert	4.01	Mukesh Ambani	44.02
2.	Deepak Parekh	3.74	Brijmohan Lall Munjal	15.76
3.	S.Ramadorai	3.37	A.M.Naik	8.39
4.	Jagdish Khattar	3.25	D.Bhattacharya	8.24
5.	Jagdish Khattar	3.25	Martial G.Rolland	5.31
6.	B.Muthuraman	2.82	Y.C.Deveshwar	4.80
7.	K.V.Kamath	2.79	Raymond Bickson	4.55
8.	Aditya Puri	2.38	Sanjeev Aga	4.06
9.	P.T.Siganporia	1.71	Deepak Parekh	3.74
10.	P.R.Menon	1.47	S.Ramadorai	3.37
11.	Ravi Uppal	1.45	Ravi Kant	3.18
12.	Pravin Kadle	1.34	B.Muthuraman	2.82
13.	Bhaskar Bhat	1.31	K.V.Kamath	2.79
14.	Vivek Saraogi	1.16	Aditya Puri	2.38
15.	N.Srinath	1.15	Ravi Uppal	1.45
MEAN		2.3467	MEAN	7.6573
SD		1.0252	SD	10.6647

Source : CMIE

Result: There is significant difference in the salary of Public Sector CEOs and Private Sector CEOs. [ t cal = 2 .4544, t tab = 2.1604, at α .05] between Public sector CEOs salary (Mean = 2.3467, SD = 1.0252) and Private sector CEOs salary (Mean = 7.6573, SD = 10.6647). Since t cal > t tab hence null hypothesis Ho3 was rejected.

CONCLUSION:

There are in all three hypothesis of association among macro variables. All three of the hypotheses for predictors of compensation have been rejected; they are linked with promoter and professional CEOs salary, profits, CEOs of Public sector and Private Sector Company.

Far too many CEOs get paid large sums even when they don’t perform. CEOs should be well paid when they do perform, but there is no justification for paying for non-performance. Shareholders are demanding the right to approve pay packages due to that. Following the tradition of British companies, “say on pay proposals on proxy statements are gaining momentum in the US. However, by not paying CEOs based on company performance, boards are failing to execute their responsibilities. If this were to happen, who would determine these complex compensation packages? The courts? The Securities and Exchange Commission? External Governance gurus, who have no responsibility for the corporation’s performance? None of these alternatives make sense. In fact, they threaten the very foundation of our system of governance. The real problem is paying enormous sums to CEOs who fail to perform. Our system of capitalism is taking risks and being rewarded for success, not on guaranteeing huge payouts to CEOs who destroy shareholders value.

It is ironic that by guaranteeing CEO compensation, boards put their CEOs at minimal risk while putting employees at far greater risk. When CEOs in these firms fail, it is the employees who lose their jobs and their income, while CEOs pocket their guaranteed pay. The underlying cause of this problem is the failure of boards to develop their future CEOs internally, often yielding to investor pressures to hire a corporate savior. Executive compensation should be tied up with the company’s long-term objectives and based on the firm’s economic value, not its stock price. CEO compensation should be based solely on a comparator group, which can be easily negotiated. Rather, internal equity should be given equal weighting between CEOs and their subordinates are narrowed and that is rewarded for the company’s success.

The Indian economy has grown at unprecedented rates in the last few years, and corporate India has played a big role in job creation, infrastructure development and raising income levels. Shouldn’t CEOs who drive this development and social reform be entitled to a fair share of the economic rewards? However, growth in CEO pay is not always correlated with improved performance. Of the 45 companies Mercer surveyed, median CEO pay grew significantly faster than revenue or earnings growth. The correlation between revenue growth and CEO pay was stronger among professional-managed companies than promoter-managed ones.

So do we need to exercise restraint? This is a good time to remember the tenet that wealth creation needs to precedes wealth distribution. Growth in CEO pay sends a signal that rewards do follow hard work; it is also a powerful motivator for aspiring managers and business leaders. Some of our wealthiest CEOs are our greatest philanthropists. But unbridled growth in pay is not in the interest of India, or of shareholders.

REFERENCES:

1. Marjorie S.Turner, “wages in the Cambridge Theory of Disrtibution,” Industrial and Labour Relations Review, April 1966, pp.390-402.

2. H.M.Gitelman, “An Investment Theory of Wages,” Industrial and Labour Relations Review, April 1968, pp.322-351.

3. John Dunlop, “The Task of Contemporary Wage Theory,” in New Concepts in Wage Determination, ed. George W.Taylor and Frank C.Pierson (New York: McGraw-Hill, 1957), pp.115,117,139.

4. Paraphrased from Bruce E.Kaufman, The Economics of Labour Markets and Labour Relations (Chicago Dryden, 1986), p. 208, 209.

5. H.Leibenstein, Beyond Economic Man: A New Foundation for Microeconomics (Boston: Harvard University Press, 1980), pp. 6,29-46; Inside the Firm: The Inefficiencies of Hierarchy (Boston: Harvard University Press, 1987).

6. Oliver Williamson, The Economic Institutions of Capitalism (New York: the Free Press, 1985), pp. 1-68.

7. G.R.Jones and C.W.L.Hill, “Transaction Cost Analysis of Strategy-Structure Choice,” Strategic Management Journal, 1988, vol.9,p.160.

8. Joseph T.Mahony and Rajendran J.Pandian, “ The Resource-Based View Within the Conversation of Strategic Management,” Strategic Management Journal, 1992, p.369.

9. Watson Wyatt Data Services, ECS Survey Report on Board of Directors Compensation, Policies and Practices (Rochelle Park, NJ: Watson Wyatt worldwide, 2001/2002), p.98.

10. Arch Patton, “The Boom in Executive Self-Interest,” Business Week, May 24, 1976,pp.16,20.

11. Corporate Directors Compensation in 1998 (New York: The Conference Board), p.27.

12. Department of Labour, Executive, Administrative, Professional, 1973, pp.3-4.

13. Peter F.Drucker, “Reform Executive Pay or Congress Will,” Wall Street Journal, April 24, 1984, p.34.

14. “Special Report: How High Can CEO Pay Go?” Business Week, April 22, 1996, pp. 100-102.

15. “Cover Story: Are Indian CEOs Overpaid?” Business Today, July1, 2007, pp. 70-82.

16. Green and Tenneriello, “Executive Merit Pay.”

17. “Executive Pay,” Wall Street Journal, April 12, 2001, pp. R12-R15 (all except Ford Motors).

18. Morton Adelby, “Wages and Salary Surveys: The Occupational Approach,” Personnel, November-Dec.1960, pp. 36-40.

19. Richard C.Smyth and Matthew J.Murphy, The Guide Line Method of Job Evaluation (Rhinebeck, NY: Smyth & Murphy Associates, Inc.).

20. Information on the interlocking of multiple pay structure is provided by Robert J.Greene, compensation consultant.

21. Kevin J. Murphy and Tatiana Sandino, “Executive Pay and ‘Independent’ Compensation Consultants” University of Southern California April 28, 2009

22. Christopher S. Armstrong and Christopher D. Ittner, “Economic Characteristics, Corporate Governance, and the Influence of Compensation Consultants on Executive Pay Levels”, The Wharton School, University of Pennsylvania David F. Larcker, Standford University Graduate School of Business
June 12, 2008

23. Kannan Ramaswamy, Rajaram Veliyath, Lenn Gomes, “A study of the determinants of CEO compensation in India”, Management International Review, April, 2000

24. Arijit Ghosh, “Determination of Executive Compensation in an Emerging Economy- Evidence from India”, Emerging Markets Finance and Trade. Vol. 42 (May 2006), pp 66-90

25. Saritha Rai, “CEO pay in India: Vulgar and indecent", ET in Asia, October 21, 2009

Received on 11.02.2011 Accepted on 25.02.2011

Asian J. Management 2(1): Jan. – Mar. 2011 page 39-45

Sr. No.	Hypothesis	Calculated value of t	Degree of Freedom	Level of Significance (at 5%)	Result
1.	Ho1	3.2520	38	1.6360	Rejected
2.	Ho2	4.5182	28	2.0484	Rejected
3.	Ho3	3.5325	28	2.1604	Rejected

1Reader, Dept. of Business Administration, Faculty of Management, M.J.P. Rohilkhand University, Bareilly. India

INTRODUCTION:

CONCLUSION:

¹Reader, Dept. of Business Administration, Faculty of Management, M.J.P. Rohilkhand University, Bareilly. India