Despite the fact that the CEO of ICICI bank Chanda Kochhar is on an indefinite leave, her salary remains unchanged and this decision has surely raised many eyebrows in the banking sector. This fact has been evidently flagged by the proxy advisory committee as it is reflecting poorly at corporate governance of the lender’s faction. According to an executive of ICICI Bank, no previous discussion had been conducted for the assigned remuneration for the CEO.
Kochhar has been facing an allegation in terms of conflict of the interest which has led to the indefinite leave until there is a decision imparted from the investigating committee handling the allegations. Shriram Subramanian, MD and Founder of the proxy firm named InGovern Research said in a statement that it is a hard fact to accept that the CEO shall be receiving full compensation during the leave period. Accepted the fact that she is a CEO of the bank, it is still not in the bank’s benefit to shower full remuneration for absence from the job. The board should have invested in a meeting in order to ascertain the pay for the time period during which she isn’t working.
During the financial year 2016-17, the CEO Chanda Kochhar received a total salary of 5.58 crore excluding the performance bonus of a whopping INR 2.2 crore. According to the annual report by the company, all of this wasn’t paid during the same year. However, her compensation during the previous years is unknown.
During a crucial board meeting held on Monday, two directors were absent from the scenario, an act which was criticized by the proxy advisers. A new position for the ICICI Bank was created when Sandeep Bakhshi was declared the director and Chief Operating Officer. He previously held the position of CEO at ICICI Prudential Life Insurance. Amit Agarwal’s replacement Lok Ranjan, who acquired the position at the board as government nominee failed to attend the board meeting along with M.D.Mallya who is former chairman of Bank of Baroda. However, there was no comment from Mallya or Ranjan’s behalf on this particular absence from the meeting.
This pattern of absence is nothing new for Ranjan as he has previously skipped many crucial meetings held at the ICICI Bank. As per the statement of an executive from the bank, the government is looking forward to keep the intervention to minimum with regards to ICICI Bank.