Iim Trichi Paper on Executive Compensation

8/11/2019 Iim Trichi Paper on Executive Compensation

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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 MasoodAsst. Professor of Finance & NCCMP Coordinator

SEBI Resource Person

Alluri Institute of Management Sciences

[email protected]
mailto:[email protected]:[email protected]


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Abstract: Are we doing really justice to Board of Directors, CEOs and other Executives with the pay package fix

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 th

corporate governance is framed in favour of employees, suppliers, and community. Public project board o

directors and CEOs as they manage company to show their power and prestige. Our objective behind wri

this paper is how in fact both board of directors and shareholders work together with an expectation, to ea

fair rate of return for their investments. If every individual in every organization follows ethics and mora

shareholders will invest their money so that organizations can maximize profits with such large amount o

share capital. Head of every division is held responsible for the capital employed and its cost as well as vaof rate of return. Cash flow is deducted from the profits on the basis of ROE. Every division should work

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 forultra vires action against the corporate governance. And they are answerable and accountable to shareholders and

general public. Board is held responsible for the success and failure of the company. In fact board will work for t

growth of the company and they serve for the company with the help of experts such as CEOs and other executivBut 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 appointm

of directors by shareholders on the basis of rotation system has been implemented under the umbrella of Corporat

Governance. Shareholders appoint the directors in annual general meeting (by rotation) (U/S 166) held at the endevery year , who in turn appoint CEOs and other managerial personnelfrom whom shareholders expect fair rate

return for their investments which attracts some other new investors for the growth of the company. Ownership a

control have been separated. Directors are also shareholders of the company which shows their interest towards th

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 leviesboundaries for directors and CEOs of thecompany for their boundary less services who devote their life for the growth of the company. And their returns i

terms of qualitative and quantitative way are not at all sufficient in relation with their pay package due to regulati

in corporate governance. Efforts and services of BOD, CEOs and other executives may not be valued in accorda

with their accountability, responsibility, and commitment.

Objectives of the study: Our experience with Country Club private limited, Bharti Axa life insurance forced me state this point that every director of the company should have direct communication channel either on phone or a

email facility with the shareholder and customer. Now a days this job is given to customer care, call centres whowork 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 andother executives deserve for a pay which

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 CEof 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 wronnotion that one of the peculiar characters of company form of organization is limited liability. To some extent

Directors, CEOs and other executivesliability may be covered by insurance schemes of corporations but the degof risk taken by the Directors, CEOs on the grounds of criminal and other offences and loss of their health cond

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 actio

made (without their notice) inside the company against Memorandum and Articles of company. In this context tosupport 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 gro

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 fanc

rates of real estates also comes down when public invest in companies. This is indirectly, changes in corp

governance providing shelter to public through which we can avoid unemployment problems and can help

the people below poverty line. . Returns from the capital employed in the business operations are greater

the cost of that capital. For all the above development every individual in nation should follow ethics. Eve

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 questio

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

next AGM, because it is a hotel company except lunch on the day AGM held company has not declared an

dividend to equity share holders. In those days people were happy because a few of the shareholders cann

effort food in a five star hotel in normal days who invested their money in that hotel company. Later on t

company has become only VIPs hotel. Whose money has been spent for whom? Whose mistake? Definitit is due to loop holes in corporate governance. During any year if company is unable to pay minimum rat

dividend to equity shareholders such companies must be closed. The rule of perpetual succession need to

altered and amended.

Internal views

Example 3: Let us try to redesign our corporate governance to obtain economic profits rather than accountin

profit. The difference here is shareholders should get a fair return of dividend (irrespective of economic irregulari

which is known as economic profit. We have an opportunity to declare dividend in the following ways. Calculatio

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 employe

were away from their families and provision of company accommodation for such employees and untimely chang

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 regar

promotions and transfers. In addition to performance based promotions at least 40% promotions shall be made on

basis of seniority. Knowledge of senior people should not go waste which is an intangible asset for any organizat

Example: An executive from a top company has been ignored to promote for higher post that has completed his p

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 quali

persons from top ranked intuitions. An underground dada may or may not require the services of a highly qualifie

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

am and following day records have been changed about his arrival time. But why? Is it a rumour or real? If it is 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 meetin

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 wayand 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 commofrom one board to another.


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Example 9: Meetings and resolutions: Directors are accountable in a general meeting to equity shareholders whic

may or may not be possible to solve at AGM. Sometimes discussions may not go as per agenda. Director sometimhas 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 challengjob for concerned directors. Sometimes he has to advise the specific member of board to speak out the issue raise

board meeting. Delegation of authority in absence of chairman is another job a director has to execute. Director m

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

be blocked until the matter is settled in court. We know the functioning of judiciary. In such a case union may raimany 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 on

day after election.

NOTE: All the examples given in our paper are not related to the companie

specified in our paper.

Some internal problems such as fines imposed on employees, termination of an employee, bad behaviour of work

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, employe

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 rela

to HR but directors have to frame a good governance based on ethics, morals and values reflecting in the vision a

mission of the company. If companies cannot solve the above issues raised by union indirectly it affects the mark

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

byMike Volker

Website: http://www.sfu.ca/~mvolker/biz/bod.htm

Investors/shareholders are interested regarding dividend payable by the company and its performance in earnin

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 IncomePreferred stock Dividends/Average commonshareholders 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(%)

2009 5.4929.04 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 1

2010 8.7421.02 720 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 1

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 1

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 2

2013 9.8211.02 298 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 2

2014 --

11.85280 -- 25.77 395 --

6.637 165 -- 67.38 2175 -- 20.67 968 -- 11.07 2

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

11th April, 2014

ROE: Return on equity in percentage % (Average of open and closing market price

share for that year)

Estimated ROE for 2014 and 2015 calculated on the basis of trend values (Yc=a+bX) equation of straight l

trend

a = Sum total earnings(Y) divided by Total Number of years (N): b = sum total of earnings multiplied with dev

(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 Industrie

D/P

(%)

ROE(

%)

Mps D/P

(%)

ROE(

%)

Mps D/P

(%)

ROE(

%)

Mps D/P

(%)

ROE(

%)

Mps D/P

(%)

ROE(

%)

Mps D/P

(%)

ROE(

%)

2009 4.90

28.01533 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

2010 4.03

25.66656 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

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

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

2013 7.459.41

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

2014 --

3.05322 -- 13.12 106.2 --

18.89 303.2 -- 9.66 217.2 -- 13.13 1298 -- 12.11

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

11th

April, 2014

ROE: Return on equity in percentage % (Average of open and closing market price share for that year)

ROE for 2014 and 2015 calculated on the basis of trend values (Yc=a+bX)

a = Sum total earnings(Y) divided by Total Number of years (N): b = sum total of earnings multiplied with dev

(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 sha

can analysed that few follow a stable dividend policy in terms of pay-out ratio whose return on equity was also

where as if the pay-out ratio increases and return on equity declines or vice versa, we can say that the company

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 corpora

performance can directly influence how policy makers take care of their shareholders wealth to keep stable gr

their market price.

Suggestions: Working with an inefficient manager creates lot of problems. The real problem is corruption, m

of funds and vested interest. It needs good governance which comes from participation of public, shareholders

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 undewrong 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 o

ethical code of conduct, avoidance of economic irregularities, global competition, avoiding third party involvem

between shareholder and directors of the company are some of the factors helps us to regain our investments w

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 2013Cr Rs

2012Cr Rs

2011Cr Rs

2010Cr Rs

2009Cr Rs

CEO Pay package(Cr)Rs

1 Jindal steelReported 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 85.333 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

earningsReturn 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

low rate of dividends. A low ratio is an indication that company is retaining earnings for future growth. But at

same time shareholders should find out the reasons for low rate of dividends are paid by the company. Performthrough earnings means profitability. In the above table return on common shareholders equity decreased in 20

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


1 Apollo

TyresReported 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 Dividendspay-out ratio%

8.06 13.90 12.71 9.11 20.98

7 Averageearnings

Return on commonshareholders 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

out ratio is more than the ROI means company declared more dividends.


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4 Rs in Crores


1 Hero moto

corp

Reported Net

Profit2,118.18 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 AverageEarnings

Return oncommon

shareholdersequity 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 i

than the pay-out ratio means company has retained earnings for growth purposes. During 2011 and 2010 comp

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 CadilaHealth care

Reported NetProfit

498.60 657.50 610.40 503.30 265.9028.63 Cr. PA

2 Equity

Dividend153.60 153.60 128.00 102.40 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

Profit403.65 385.11 210.98 353.68 363.52

51.51

2 Equity

Dividend71.49 59.58 29.79 47.66 47.66

3 EquityDividend (%)

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 payratio%

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

Profit5,096.30 5,730.00 7,716.90 9,426.15 7,743.84

23.49 (crores)

2 Equity

Dividend379.80 379.80 379.80 379.79 379.65

3 EquityDividend (%)

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

Profit384.96 1,237.46 1,065.72 836.55 407.89

39.01 (crores)

2 EquityDividend

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 Dividendpay-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


1 Gujarat fluro

chemicals

Reported Net

Profit398.34 431.60 263.63 334.15 340.14

37.80 Crores

2 Preference

Dividend0.00 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 1,230.837 Dividend pay-out

ratio%9.65 8.90 14.58 11.50 11.30

8 Average

earningsROE% 17.18 22.19 16.09 24.22

10 Rs in crores


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1 Ambuja

CementsReported 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-outratio%

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


1 Larsen and

toubroReported Net Profit 4,910.65 4,456.50 3,957.89 4,375.52 3,481.66

26.11 crores


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 12,459.697 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

IndustriesReported 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 0.003 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


1 ICICI Total 15,379.70 11,483.44 8,615.76 6,834.54 6,193.87 1 crore


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


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14

Sl.No Company Particulars

2013

2012 2011 2010 2009

1 WiproReported Net Profit 5,650.20 4,685.10 4,843.70 4,898.00 2,973.80


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

7Dividend pay-out ratio%

30.52 31.48 30.4017.98 19.70

8 AverageROE%

23.2620.51

24.8332.42

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.


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Aswathappa K,Organizational Behaviour, Tata Mc Graw hill Publications, 2005

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Web sites:

Google.com

Moneycontrol.com

Salaries.com

Magazine:

Business India

News Papers

The Hindu

Times of India

Documents

Iim Trichi Paper on Executive Compensation