ICICI Bank's top management to forego performance bonus
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ICICI Bank's senior management will not receive performance bonus for FY16, Managing Director and Chief Executive Officer Chanda Kochhar said in an analysts' conference call on Friday.
The decision comes at a time when the bank is reeling under bad loans, which are expected to remain elevated in the coming quarters. Also, the management has forecast lower net interest margin, a key indicator of profitability, by 20 basis points in FY17. For FY16, NIMs were recorded at 3.49 per cent.
However, the middle management level, which includes employees at the deputy general manager level and below, will still be rewarded with bonuses, Kochhar added.
According to the bank's annual report of FY15, the top management comprising Kochhar and the three executive directors - N S Kannan, K Ramkumar and Rajiv Sabharwal - earned a cumulative performance bonus of Rs 4.85 crore.
For the senior management, stock options form a large part of the overall compensation package that includes other components such as basic salary, allowance, and prerequisites.
This is not the first time that the senior management will not be taking home the performance bonus. During 2008-09 also, the bank had not given performance bonuses and stock options to top management. Also, the employee stock options of second-rung management, from assistant general managers to senior general managers, were slashed by half. The decision had been taken at a time when for the quarter ended March 31, 2009, the bank's net profit had dropped by 35 per cent to Rs 744crore.
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