Mutual fund (MF) house CEOs have emerged as the blue eyed boys of the banking and financial services industry with fat salaries and perks. For financial year 2019-20 (April 2019 to March 2020) the salaries of top 10 MF CEOs saw an increase / decline in the range of -19% to +132%.
These increments were given sometime in April-May 2019. During the financial year 2018-29 (April 2018 to March 2019), the Nifty50 generated a return of 13%.
The salaries of mutual fund CEOs and other key personnel have been a subject of a lot of debate recently. One because majority schemes are unable to beat the index despite high management fees and other because MF managers fare poorly in skin of the game metric. Key personnel have invested just 0.13% in their own schemes.
In a circular issued in April, SEBI had said that part of compensation (minimum 20%) of key employees of a mutual fund house will be paid in the form of units of scheme in which they have a role. The implementation date has been extended till October 1, 2021.
So, who are the highest paid MF CEOs?
1. Milind Barve of HDFC MF tops the list with a salary of Rs 7.4 crore in FY 2019-20, an increase of 3%. He retired in Feb. 2021 after being the longest-serving chief in the Indian mutual fund industry.
2. Nilesh Shah of Kotak MF is the second on the list with a salary of Rs 7.3 crore, an increase of 68%. He has over 25 years of experience in capital markets and market related investments.
3. Nimesh Shah of ICICI Prudential MF is the third on the list with a salary of around Rs 7 crore, an increase of 12%. He is a chartered accountant by profession and has over 28 years of experience in the BFSI sector.
4. Sundeep Sikka of Nippon India MF is fourth on the list with a salary of Rs 6 crore, a decline of 8%. Sundeep has held both Vice-Chairman and Chairman positions of the industrial body AMFI (Association of Mutual Funds in India).
Top 12 CEO salaries across Mutual Funds
5. A Balasubramanian of Aditya Birla Sun Life MF is the fifth on the list with a salary of Rs 5.41 crore, a decline of 7%. He has over 26 years of experience in the mutual fund industry.
6. Vishal Kapoor of IDFC MF is the sixth on the list with a salary of Rs 5.12 crore, an increase of 2%. Vishal was earlier posted as Head of Wealth Management at Standard Chartered Bank.
7. Chandresh Nigam of Axis MF is the seventh on the list with a salary of Rs 4.8 crore, an increase of 21%. He is an IITan from Delhi and was earlier with ICICI Prudential.
8. Imtiyazur Rehman of UTI MF is the eighth on the list with a salary of Rs 4.48 crore, almost doubling from the previous period. He is a Cost Accountant with more than 30 years of experience.
9. Kalpen Parekh of DSP MF is the ninth on the list with a salary of Rs 3.5 crore, an increase of 17%. He has over 19 years of experience and holds a Master's Degree in Management Studies in Finance from the Narsee Monjee Institute of Management Studies.
10. Sanjay Sapre of Franklin Templeton MF is the tenth on the list with a salary of Rs 5.41 crore, a decline of 7%. He has a total experience of 2 years and holds a MBA degree from Ohio University, United States.
What will salaries look like for FY 2020-21?
In FY 2019-20, NIFTY50 generated a return of -26%, as markets plunged in March 2020, due to the announcement of lockdowns. It remains to be seen whether the salary increments for FY 2020-21 which would have been decided in April / May 2020 during peak of first wave, were impacted by the coronavirus pandemic or not.
The numbers are not yet out and will be keenly watched. We have seen in an earlier article that salaries of corporate CEOs have not been impacted by the pandemic.