Hindustan Unilever’s Sanjiv Mehta continues to be the highest paid FMCG CEO in the country, with a gross salary of Rs 19.42 crore in FY 19-20.
But when it comes to hikes, Marico’s Saugata Gupta comes on top. His gross salary went up by 49.5 percent in 2019-20 to Rs 13.78 crore. The remuneration of Gupta includes the perquisite value of stock options exercised during the financial year FY20 amounting to Rs 2.91 crore.
Mehta’s salary of Rs 19.42 crore increased only 2.86 percent from FY18-19. The salary of Sanjiv Puri of ITC jumped by 27.21 percent to Rs 7.83 crore in FY19-20.
Britannia MD Varun Berry’s salary increased by 7.58 percent to Rs 9.78 crore in FY19-20, and Dabur’s Mohit Malhotra, who took over as CEO from April 1, 2019, took home a salary of Rs 6.61 crore in FY19-20.
Details of Emami Ltd were not available as the company is yet to release its annual report.
Are these salaries linked to the performance of companies?
Not really. The competition in the FMCG sector is cut-throat, intense on volume and margins, and runs on distribution muscle with ad blitz. FMCG CEOs enjoy this spotlight but are under continuous pressure every quarter to deliver results and growth.
In 2019-20, HUL’s net profit saw an 11.48 percent rise to Rs 6,756 crore from Rs 6,060 crore in the previous year. Its sales stood at Rs 39,136 crore, marginally up 1.44 percent.
Marico’s net profit rose 13 percent in 2019-20 to Rs 1,072 crore (excluding exceptional items) and sales fell marginally to Rs 7,315 crore. The company sells renowned brands such as Parachute, Saffola Edible oil, Parachute Advanced, Nihar Naturals, Livon.
Cigarette-to-hotel conglomerate, ITC’s net profit grew by 21.4 percent to Rs 15,136.05 crore, while its sales went up 3.2 percent to Rs 50,968 crore. It sells brands such as Aashirvaad, Sunfeast, Bingo! YiPPee! Savlon, Fiama, Vivel, among others.
In FY19-20, Britannia’s net profit was up 32 percent to Rs 1,484 crore.
Mehta’s big, fat cheque
According to the latest annual report, Mehta’s remuneration of Rs 19.42 crore was 151.22 times higher than the average ratio of remuneration of HUL employees. In FY19, too, he was the highest paid CEO among the three FMCG companies.
If we look at the salary break-up, Mehta drew a salary of Rs 12.46 crore, along with a bonus of Rs 3.31 crore, stock option of Rs 3.20 crore and Rs 0.45 crore as contribution to PF, superannuation and consultancy fees.
HUL sells prominent brands such as Surf Excel, Rin, Wheel, Sunlight, Vim, Pureit, Lux, Lifebuoy, among others.
Bad economic conditions
In FY20, the macro-economic environment was particularly challenging, and there was a sharp decline in consumption, especially in rural areas.
In the last month of FY20, COVID-19 hit the country. In the third week of March, the government announced the lockdown, and this disrupted the supply chain.
To tide over the crisis, most FMCG companies entered into innovative tie-ups with food-delivery chains like Swiggy and Zomato.