Indefinite fully paid leave for ICICI Bank CEO Chanda Kochhar raises eyebrows

Indefinite fully paid leave for ICICI Bank CEO Chanda Kochhar raises eyebrows

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.

Who is Sandeep Bakhshi? Know the new COO of ICICI Bank

Who is Sandeep Bakhshi, Know the new COO of ICICI Bank

Sandeep Bakhshi, till now the CEO of ICICI Prudential Life Insurance has been given the assignment of ICICI bank’s top slot. He is now the new chief operating officer (COO) of country’s largest private sector bank. His predecessor, Chanda Kochhar has gone on leave, pending the completion of a probe over an alleged conflict of interest that has led to some ethical and financial complications.

The ICICI Bank board has approved the appointment of Bakhshi to the post of COO for the next five years. Had he not pursued his management studies, he would have been a top army officer, since he had cleared NDA, but regretted that he did not join it. He will be responsible for all the businesses and corporate functions at the bank. He will report to the bank’s board.

Though there were a number of other senior officers at ICICI, who could have been chosen but the choice of Bakhshi was seen as he is a leader who works differently. He stays away from factionalism and thus able to take the team along.

Bakhshi is credited with taking the first Indian insurance company public to a considerable height. He is known to be as “cool as a cucumber” and is known for stability.

Bakhshi earlier headed the group’s non-life insurance company ICICI Lombard General Insurance Co. Ltd for two years between March 2007 and April 2009. He assumed the charge of deputy managing director and head of retail before shifting to the life insurance wing of the bank in August 2010.

With a lot of working experience in the sectors of project financing, risk management and corporate banking, he is regarded as an institution builder.

Bakhshi was called back to ICICI Bank after serving as managing director and CEO of ICICI Prudential for almost a long stint of eight years. Technically, he will be the senior-most official at ICICI Bank after Kochhar, but since she is asked to proceed to leave, he will be reporting to the Board of the bank.

Bakhshi studied mechanical engineering. He is also a post-graduate in Management from Xavier Labour Relations Institute, Jamshedpur. He is pitted to face the challenge to restore the concerns of investors, shareholders and regulators and bring them back into the mainstream of corporate governance. Investors look at him to redress the problems of the bad loan. This has been a blot on the bank for about the preceding three financial years.

A top banker says on his choice, that the appointment is the most practical middle ground that the board could have resorted to. His priorities would be to get the leadership team to and install the support system as well as assist in the conduction of investigation in a fair and transparent manner.

People believe that Bakshi will be successful in taking ICICI Bank shares to a new height which had been underperforming for quite a time as compared to its private sector peers over bad loan concerns. After his appointment, these concerns over governance issues and corporate loan demand are also expected to improve the share prices.