New Delhi, Jan. 14: IIM Ahmedabad has mooted a proposal to offer its new director an annual package of Rs 1 crore, a five-fold raise, to attract talent.
If the proposal survives divisions, the package will be the highest among the Indian Institutes of Management. At present, IIM directors get a package of around Rs 20 lakh a year, including a basic salary of Rs 80,000 per month.
The human resource development ministry had two years ago allowed the business schools to top up the packages from their own resources generated through tuition fees, executive programmes and consultancy.
IIM Ahmedabad is in the process of appointing a director as the tenure of Samir Barua, who is on extension now, ended in October last year.
"The board of governors is planning to offer Rs 1 crore to the new director to ensure that a good academic gets the job," an institute source said.
IIM Ranchi chairperson and Maruti Udyog chairman R.C. Bhargava told The Telegraph the move of IIM Ahmedabad was welcome and would attract the best talent.
Bhargava had headed a committee set up by the HRD ministry in 2011 and had suggested that the IIMs should be allowed to recruit faculty by offering a package of up to Rs 50 lakh a year. But the institutes would have to bear the additional financial requirement from their own resources.
"A director is like the CEO of an institution. Currently, the CEO of a standard company gets around Rs 1 crore to Rs 2 crore per annum. If IIM Ahmedabad is offering Rs 1 crore, it is a good initiative," Bhargava said.
But the package has apparently fuelled a debate among the IIM community. An IIM director said the proposal might set a trend and the new IIMs could be affected. "Can the new IIMs offer such a package? Will it not create categorisation among the IIMs?" the director asked, although an unofficial classification does exist in practice.
He, however, said the present package of Rs 20 lakh should be revised. "You have to think of equity and excellence. In the name of excellence, you cannot ignore equity and vice-versa. You have to strike a balance," he said.
Another IIM director justified the move, saying the package of top administrators at Ivy League institutions in the US was "somewhere between $300,000 and $500,000 a year (between Rs 1.6 crore to Rs 2.7 crore)". "But their corpus is much higher than ours," he added.
Some IIMs have been able to increase their corpus in recent years. IIM Ahmedabad, IIM Bangalore and IIM Calcutta do not depend on the ministry for meeting operational costs like salary, pension, other benefits and maintenance of facilities.
An HRD ministry official said the appointment of the new director would have to be cleared by the ministry. The board of governors will suggest three possible names, the ministry will choose one and send it to the appointments committee of the cabinet. The institute is yet to submit the names or reveal the package they want to offer.