Case Study Frst 3 Pages

7/31/2019 Case Study Frst 3 Pages

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HD FC B an k

C om pa ny Profi le :

HDFC Bank was incorporated in August 1994, and, currently has a nationwide network of 1,506 branche

and 3,573 ATM's in 635 Indian towns and cities. It was amongst the first to receive an 'in principle' approva

from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalisation o

the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Ban

Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Schedule

Commercial Bank in January 1995.

HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound customer

franchises across distinct businesses so as to be the preferred provider of banking services for target retail and

wholesale customer segments, and to achieve healthy growth in profitability, consistent with the bank's risk

appetite. The bank is committed to maintain the highest level of ethical standards, professional integrity

corporate governance and regulatory compliance. HDFC Bank's business

philosophy is based on four core values - Operational Excellence, Customer Focus, Product Leadership and

People.

The Remuneration package for executives has been compared with Sales, PAT and Shareholders net-

worth:

(Amt in Cr.)

Managerial

Remuneration

Sales PAT Shareholders net

Worth

2004-05 1.47 3093.49 665.56 4519.85

2005-06 1.55 4475.34 870.78 5299.53

2006-07 2.16 6647.93 1141.45 6433.15

2007-08 2.89 10115 1590.2 11497.24

2008-09 3.889 16332.26 2244.94 15052.74

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in

Cr

18000

16000

14000

12000

10000

8000

6000

4000

2000

0

2004-05 2005-06 2006-07 2007-08 2008-

09

4.5

4

3.5

3

2.5

2

1.5

1

0.5

0

The trend line shows that there is a positive correlation between the Managerial remuneration and the

banks performance. This shows that the MD has been performing well to bring up the revenues of the

bank. The remuneration amounts to 0.05% of Sales, 0.2% of PAT and 0.03% of Shareholders net worth.

Break-up of Managerial Remuneration:

FY 2004-

05:

The details of the remuneration paid to Mr. Puri during the year 2004-05 are as under:

Salary 72,00,000

Allowances

1,25,924

Performance Bonus

36,00,000

Provident Fund

8,64,000

Gratuity

1,55,427

Superannuation

64

Sale

PAT

Sharhoeholde

rsNetworth

Remuneratio


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10,80,000

Stock options

45,000

Mr. Jagdish Capoor was re-appointed as part-time Chairman of the Bank with effect from July 6, 2004.

During the year Mr. Capoor was paid remuneration of Rs. 8,20,968/-. Mr. Capoor was also paid sittingfees for attending Board and Committee meetings.

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FY 2005-06:

The details of the remuneration paid to Mr. Puri during the year 2005-06 are as under:

Basic 90,00,000

Allowances 13,83,247

Performance Bonus 51,46,020

Provident Fund 10,80,000

Superannuation 13,50,000

FY 2006-07:

Mr. Aditya Puri has been re-appointed as Managing Director of the Bank for three years with effect from

April 1, 2007. The details of the remuneration paid to the Managing Director during the year

2006-07 are as under:

Basic 90,00,000

Allowances 13,83,247


Provident Fund 10,80,000

Superannuation 13,50,000

During the year Mr. Capoor was paid a remuneration of Rs. 9,00,000/-.

FY 2007-08

Mr. Jagdish Capoor, Chairman

During the year, Mr. Jagdish Capoor was paid remuneration of Rs. 12,00,000/-. Mr. Capoor has not availed

of the benefit of Banks leased accommodation. Mr. Capoor was also paid sitting fees for attending

Board and Committee meetings.

Break up of remuneration Amount Paid (Rs.) for Executive Directors:

Particulars Aditya Puri Harish Engineer Paresh Sukthankar

Basic 99,00,000 15,87,730 10,61,177

Allowances 22,73,570 6,24,185 11,87,206


Provident Fund 11,88,000 1,90,528 1,27,341

Superannuation 14,85,000 2,06,405 1,37,953

Stock option 1,00,000 34,000 34,000


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Case Study Frst 3 Pages