The RBI on Monday suggested that at least 50 percent of the compensation of senior officials of both private and foreign banks, including whole time directors and chief executive officers, “should be variable.“
As per the guidelines, the variable pay is capped at 70 percent of fixed pay but did not include the Employees Stock Ownership Plan.
The proposed guidelines also said a minimum of 50 percent of variable pay is to be via non-cash component.
The RBI on Monday suggested that at least 50 percent of the compensation of senior officials of both private and foreign banks, including whole time directors and chief executive officers, “should be variable.”
According to RBI, Variable pay is to be capped at 200 percent of fixed pay. As per the guidelines, the variable pay is capped at 70 percent of fixed pay but did not include the Employees Stock Ownership Plan.
The proposed guidelines also said a minimum of 50 percent of variable pay is to be via non-cash component. It should be ensured that a proper balance is to be maintained between fixed pay and variable pay. The total pay shall be limited to 200 percent of the fixed pay. Further, in case of divergence, no draft for an increase in variable pay (for the assessment year) should be entertained.