When CEO pay packages hurt employee morale

Veteran CEO and author Shiv Shivakumar says there's no justification for a CEO being paid 400 times the median employee salary

- Abhishek Mukherjee

Every time companies' annual results are announced, there's one figure that is tracked even more keenly than the bottom line—the whopping pay packages CEOs take home, even as the average employee has to make do with paltry hikes which barely cover the cost of living. Shiv Shivakumar, former chief executive of PepsiCo India, Nokia India and one of India's longest-serving CEOs, who recently published his latest book, The CEO Mindset, which touches upon leadership thinking, strategy and personal growth, says CEOs need to be aware of such disparities because reaching the corner office isn't just about talent.

In an exclusive interview with Mint, Shivakumar delves into what it takes to rise to the top in the business world, as well as what we can learn from the recent spate of scandals engulfing India Inc. Edited excerpts:

You talk about having a certain mindset to be a CEO, which is not developed only after bagging the top job, but displayed throughout one's career. Can you elaborate on that?

I call it the 'C.H.A.R.L.I.E' mindset. C stands for communication. In today's hyper-competitive world, if you cannot build a simple narrative that hits home, you're gone. H is holistic thinking—even when you're a junior manager, you are looking at the big picture. A is absolute standards, where you want to be the absolute best at what you do, and not just better than your co-worker. R is reframing of issues, the ability to look at a problem from a different perspective. L stands for legacy thinking, which means you want to leave behind a legacy, no matter what your role. I stands for investing in people, which means your team members should be better off at the end of your tenure than when they started. And E is ethical execution, which is often the first thing that is flouted before a company starts seeing more trouble.