MPs and CEOs

A close friend whom I am very fond of sent me a mail about how MPs are such a waste of money when compared with the CEOs and the later's salaries should not be a concern of the government. Her note is appended to this blog at the end! My reply to her!

Dear Bhanu
your note about the salary of MPs is fascinating but you should compare with the work and responsibilities they carry vis a vis a corporate executive whose only reason for existence is not to provide quality product but to maximise profits at all costs. The salary of a corporate executive is directly proportional to the profits he or she generates and the higher salary he or she seeks to earn the greater would be the burden on the consumer as this cost would be passed on to the ultimate consumer.
Also the perspective you should have is that for a one crore plus population we have just around 600 representatives and even assuming that each of us put in Rs 1 per day for upkeep and maintenance of our representative we would have covered their costs but we must remember that we may be investing not less than rs 5000 to rs 10,000 in extra costs that we have to spend for our products because the companies have to earn profit. Just one example, take the toothpaste. an average toothpaste tube of 50 gm would cost u Rs 40 and the cost of manufacturing of this tube would be hardly 30 per cent of the price and the rest would go for advertising and profit margin.
check this news headline
"Colgate Reports Strong 1st Quarter EPS up 14% to $ .56 on 6% Unit Volume Growth Highest Dollar Sales Growth in Seven Years"
This amounts to 54 per cent profit margin! Why are we made to pay so much because the average earning of a CEO as a percentage of total revenue of any industry is more than 12 per cent

"In 2004, the average CEO of a major company received $9.84 million in total compensation , according to a study by compensation consultant Pearl Meyer & Partners for The New York Times. This represents a 12 percent increase in CEO pay over 2003. In contrast, the average nonsupervisory worker?s pay increased just 2.2 percent to $27,485 in 2004."

What we should be looking at should be how to engage these "illiterate" representatives of people to do some good work for us as after all an illiterate Kamaraj was one of the kingmakers who made a lot of difference for us as Indians and one "illiterate" MGR and Karunanidhi have been successful chief ministers of Tamil Nadu ditto for AP (NTR).

Bhanu's forwarded note!

Have a look at this Salary & Govt. Concessions for a Member of Parliament (MP)
Monthly Salary : 12,000 Expense for Constitution per month : 10,000 Office expenditure per month : 14,000 Traveling concession (Rs. 8 per km) : 48,000 ( eg.For a visit from kerala to Delhi & return: 6000 km) Daily DA TA during parliament meets : 500/day
Charge for 1 class (A/C) in train: Free (For any number of times) (All over India )
Charge for Business Class in flights : Free for 40 trips / year (With wife or P.A.)
Rent for MP hostel at Delhi : Free
Electricity costs at home : Free up to 50,000 units
Local phone call charge : Free up to 1 ,70,000 calls.
TOTAL expense for a MP [having no qualification] per year : 32,00,000 [i.e. 2.66 lakh/month]
TOTAL expense for 5 years : 1,60,00,000 For 534 MPs, the expense for 5 years : 8,54,40,00,000 (nearly 855 crores)
AND THE PRIME MINISTER IS ASKING THE HIGHLY QUALIFIED, OUT PERFORMING CEOs TO CUT DOWN THEIR SALARIES…..
This is how all our tax money is been swallowed and price hike on our regular commodities.......