New Delhi/London: NRI steel magnate Lakshmi Mittal earns a pay packet of over $3.6 million in cash as Mittal Steel's Chief Executive Officer – a figure which is over 33 times of the average annual compensation of a CEO in India.
Mittal earned a base salary of $2.005 million and $1.677 million in performance related payments in 2006, Mittal Steel disclosed in its annual report sent to its shareholders last week.
Besides, the India-born business tycoon was also granted 1,00,000 stock options worth about $1.8 million in 2006 – taking the total options held by him to 4,40,000 with an estimated value of over $8 million.
Even after excluding the stock options part, Mittal's total cash compensation in a year makes the average pay packet of a CEO in India pale in comparison, which has been put at $1,11,510 by human resources consultancy firm Mercer HR Consulting.
Mittal's base salary of about $2 million is also more than 22 times of the average base salary earned by a CEO in India.
According to a recent survey conducted by Mercer HR, Indian CEOs are paid the lowest among their Asian counterparts with a base salary of $89,759 and total annual cash payments of $1,11,510.
The huge gap comes despite Mittal taking a pay cut of $1,89,000 from about $2.2 million of base salary in 2005. He also did not get any performance related payments in 2005, although he held stock options worth about $6 million at the end of that year.
The net worth of the CEO of Mittal Steel, now called Arcelor Mittal, was put at over $32 billion by the US-based business magazine Forbes earlier this year. He has been named as the world's fifth richest person and top in India as well as the UK.
After being named as the CEO of the enlarged Arcelor Mittal, the company formed after world's largest steel maker Mittal Steel acquired its closest rival Arcelor for over $33 billion, Mittal's salary should only go higher.
Aditya Mittal, son of Lakshmi Mittal and Chief Financial Officer of Mittal Steel, took home a base salary of $9,42,000 in 2006, which is over ten times the average base salary of an Indian CEO.
Aditya also earned short-term performance related payments of $1.6 million last year, taking his total pay packet to over $2.5 million, which is over 22 times of the average total annual cash earned by a CEO in India.
The Mittal Steel CFO, whose basic salary dropped from $1.2 million in 2005, was also granted 75,000 stock options last year, taking the total options held by him worth about $4.9 million.
Moreover, his total remuneration is only for a period of ten months (January to October 2006), as he had resigned from Mittal Steel's board on October 30, 2006 but continued as the CFO.
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