HDFC Bank CEO earns 108M rupees as India's highest-paid bank boss

HDFC Bank Ltd. CEO Sashidhar Jagdishan's annual compensation rose to nearly 108 million rupees, consolidating his position as India's best-paid bank CEO in a year when most lenders increased executive compensation.

Jagdishan, managing director and CEO of India's biggest private sector lender since October 2020, saw his total compensation increase 2% to 107.9 million rupees in the fiscal year ended March 31, 2024, according to data compiled by S&P Global Market Intelligence. He was also the country's highest-paid bank CEO last year. His compensation included approximately 29.4 million rupees in annual salary, 37.1 million rupees in bonuses and 41.4 million rupees in "other" compensation.

ICICI Bank Ltd. Managing Director and CEO Sandeep Bakhshi was the second highest-paid bank CEO in India, pushing Axis Bank Ltd. CEO Amitabh Chaudhry down to third on the list. Bakhshi earned 99.7 million rupees in the fiscal year, including a salary of 34.6 million rupees. Chaudhry's total compensation was 91 million rupees, including a salary of 45.1 million rupees, according to Market Intelligence data.

IndusInd Bank Ltd. CEO Sumant Kathpalia was the fourth best-paid CEO on the list, earning 75 million rupees in the fiscal year. Like CEOs of other private sector banks, "other" compensation made up a significant portion of Kathpalia's earnings, netting him 58.3 million rupees.

Performance gap

The compensation packages of CEOs at private sector banks dwarfed those of their public sector counterparts. The total annual compensation of the heads of India's five largest public sector banks ranged between 3.9 million rupees and 4.8 million rupees.

While Indian banks generally benefitted from a strong economic recovery, private sector banks outperformed their public sector peers on key metrics. Nine of the top 10 lenders in S&P Global Market Intelligence's recent inaugural financial performance ranking were private sector banks, with Kotak Mahindra Bank Ltd. in top spot. Seventh-placed Bank of Maharashtra was the only public sector bank in the top 10.

Kotak Mahindra CEO Ashok Valiram Vaswani received total compensation of 16.2 million rupees.

Public sector banks are likely to narrow the performance gap versus private sector lenders, given India's rapid economic growth and government reforms, analysts previously told Market Intelligence. The median net interest margin (NIM) among public sector banks improved to 3.01% in the fiscal year ended March 31 from 2.90% in the previous year, Market Intelligence data shows. Comparatively, the median NIM at private sector banks fell to 3.99% from 4.09% in the prior-year period.

India's economy is projected to grow by an average of 6.7% per fiscal year from 2024 through 2026, the World Bank said in a June 11 report.

Public sector banks

The former chairman of India's largest bank by assets, State Bank of India, Dinesh Kumar Khara, who retired Aug. 27, received a more than 6% bump in his total compensation in fiscal 2024, pushing it up to 3.9 million rupees. This included a salary of 2.7 million rupees and 1.2 million rupees in "other" compensation.

Union Bank of India Managing Director and CEO Arumugam Manimekhalai received the largest year-over-year increase in total compensation among the CEOs of public sector banks. His compensation increased 33% to 4 million rupees, made up exclusively of Manimekhalai's salary in which there was no bonus or "other" compensation.

Bank of Baroda Ltd. Managing Director and CEO Debadatta Chand was the highest-earning CEO of a public sector bank in India, with total compensation of 4.8 million rupees. Punjab National Bank CEO Atul Kumar Goel saw his compensation fall more than 9% year over year to 4.4 million rupees.