Narayana Murthy gets support from US experts, thinkers
BENGALURU: N R Narayana Murthy's “compassionate capitalism“ philosophy has received support from several US based management experts and thinkers.
Vijay Govindarajan, Coxe distinguished professor at Tuck at Dartmouth, US, said he believes in capitalism, but not in greed. A company's purpose, he said, cannot be to maximise financial returns; the purpose has to be to do good. He noted that the Fortune 150 steel company Nucor subscribes to this philosophy and happens to be also the most profitable steel company . And its CEO compensation is not 500 times that of the steel worker, as is typical in other Fortune 500 companies.
Govindarajan said other companies following compassionate capitalism--Narayana Health in India and Whole Foods in the US--are all very successful. Vivek Wadhwa, distinguished fellow at Carnegie Mellon University Engineering at Silicon Valley, said bringing the worst practices of the US--outsized pay for corpora te executives--is not a good thing for India. “Clearly, there need to be checks and balances. If the salaries are tied to long-term corporate performance, then large payouts are justified--for large accomplishments. But golden parachutes and big bonuses for short-term accomplishments are not justified,“ he said.
With reference to the big increase in Infosys COO Pravin Rao's salary, Murthy on Sunday had said that in a poor country like India, every senior management person of an Indian corporation has to show self-restraint in his or her compensation and perquisites, and the board has to create a climate of opinion for such a fairness by their actions. This is necessary, he said, to make compassionate capitalism acceptable to a majority of Indians who are poor.
Seth Godin, American author, entrepreneur and marketer, said it's a myth that there's a talent shortage among CEOs for the largest companies. “This (big salary increases) is ego and greed, and nothing else,“ he said. Asked if one company can afford not to go with the flow, Godin also said it was. “In fact, that's the only way change ever happens,“ he said.
One contrary voice was Nirmalya Kumar, visiting professor of marketing at London Business School & distinguished fellow at Insead Emerging Markets Institute.He said Murthy was being a bit disingenuous. “When he was in management, they were owners so could keep their salary based compensation low as a way to squeeze the rest of the wages down at Infosys. Now the current management has to make its entire compensation through wages and bonus,“ he said.
Vijay Govindarajan, Coxe distinguished professor at Tuck at Dartmouth, US, said he believes in capitalism, but not in greed. A company's purpose, he said, cannot be to maximise financial returns; the purpose has to be to do good. He noted that the Fortune 150 steel company Nucor subscribes to this philosophy and happens to be also the most profitable steel company . And its CEO compensation is not 500 times that of the steel worker, as is typical in other Fortune 500 companies.
Govindarajan said other companies following compassionate capitalism--Narayana Health in India and Whole Foods in the US--are all very successful. Vivek Wadhwa, distinguished fellow at Carnegie Mellon University Engineering at Silicon Valley, said bringing the worst practices of the US--outsized pay for corpora te executives--is not a good thing for India. “Clearly, there need to be checks and balances. If the salaries are tied to long-term corporate performance, then large payouts are justified--for large accomplishments. But golden parachutes and big bonuses for short-term accomplishments are not justified,“ he said.
With reference to the big increase in Infosys COO Pravin Rao's salary, Murthy on Sunday had said that in a poor country like India, every senior management person of an Indian corporation has to show self-restraint in his or her compensation and perquisites, and the board has to create a climate of opinion for such a fairness by their actions. This is necessary, he said, to make compassionate capitalism acceptable to a majority of Indians who are poor.
Seth Godin, American author, entrepreneur and marketer, said it's a myth that there's a talent shortage among CEOs for the largest companies. “This (big salary increases) is ego and greed, and nothing else,“ he said. Asked if one company can afford not to go with the flow, Godin also said it was. “In fact, that's the only way change ever happens,“ he said.
One contrary voice was Nirmalya Kumar, visiting professor of marketing at London Business School & distinguished fellow at Insead Emerging Markets Institute.He said Murthy was being a bit disingenuous. “When he was in management, they were owners so could keep their salary based compensation low as a way to squeeze the rest of the wages down at Infosys. Now the current management has to make its entire compensation through wages and bonus,“ he said.
