India’s fat cats: Maybe those strikers have a point

Maybe India’s striking union workers have a point — even if they do have it better than legions of the poor.

According to a new study by India’s Economic Times newspaper, staff salaries have not kept up with the skyrocketing pay packages for corporate directors and senior management at Indian companies. Maybe it’s even time for Occupy Dalal Street, the business-friendly paper suggests facetiously.

Between 2001 and 2011 — boom years for India Inc. — remuneration for corporate board members rose from 0.4% to 0.6% of profits before depreciation, interest and taxes (PBDIT), while staff costs fell from 34% to 28% of PBIT, the paper said.

The study analyzed the growth of sales, PBDIT, staff costs and directors’ salaries of 236 companies of the BSE 500 Index.

At some firms, the slice of the pie carved out for the fat cats was very fat, indeed.

For instance, at paint company Kansai Nerolac, payments to board members rose 23 times over the past decade, while staffing costs increased only 7 times. Similarly,
at textiles company Century Enka, worker salaries increased 10 times, while payments rose 39 times for directors. At Orient Paper & Ind staff costs rose 23 times compared with 91 times for company directors.