In a bid to attract experienced talent, the National Asset Reconstruction Co Ltd (NARCL) has increased the total remuneration of its chief executive, Natarajan Sundar to Rs 1.7 crore, which is significantly higher than the salaries of CEOs of top state-owned banks, Livemint said in a report on Tuesday.
The remuneration, which includes a variable of Rs 44 lakh, is being seen as an attempt to be more market-driven even as the bad bank will be managing stressed loans of public sector banks, the report stated.
The salary package of Sundar, who was a State Bank of India (SBI) executive formerly, was approved by the NARCL’s Board of Directors in a meeting on May 30, Livemint reported quoting documents.
Sundar’s total compensation, including the variable pay, will make him eligible to participate in NARCL’s annual discretionary bonus plan. The CEO’s salary is based on the achievement of annual targets set by the Board and approved by the regulator, the documents reviewed by Livemint stated.
However, the NARCL’s chief executive’s revised salary is lower than his counterpart’s at the largest private asset reconstruction company Edelweiss ARC. RK Bansal, Edelweiss ARC’s CEO, gets an annual remuneration of Rs 3.25 crore.
The revision of Sundar’s compensation comes at a time when the salary gap between public and public sector lenders has grown. As compared to the top executives of private sector lenders, heads of state-owned banks earn less than 10 per cent of their salaries. For example, SBI chairman Dinesh Khara in FY22 earned Rs 34.4 lakh, while his HDFC counterpart, chief executive Sashidhar Jagdishan was paid Rs 6.52 crore.