At a time when people working in most industries have got muted or nil incentives and bonuses due to the impact of the Covid-19 pandemic on businesses, bonuses at some of India’s leading broking firms could be anywhere between six to nine months of salary (cost-to-company) and the increments could be in the range of 10-18%, top officials and industry experts told ET.
Exceptional performers, especially in areas such as account opening and large-ticket trade facilitation, may get even fatter bonuses ranging from 120-300% of annual CTC, they said. Most brokerages calculate annual employee bonus as a percentage of CTC.
“Average salary increases in India Inc, in comparison, is expected to be 7-8% in 2021”
Average salary increases in India Inc, in comparison, is expected to be 7-8% in 2021, according to various estimates.
“The markets have seen all-time highs this year and that will translate into handsome performance-based bonus payouts for the good performers,” said CJ George, founder and managing director of Geojit Financial Services. “This could be one of the best years in the last ten years,” he said.
Officials of brokerages including Motilal Oswal, IIFL and Zerodha, too, confirmed handsome payout to their employees.
“Despite the pandemic, the broking sector was not impacted, and markets scaled new highs. This will also reflect in employee payouts,” said Sudhir Dhar, executive director and head human resources at Motilal Oswal Financial Services.
Increased investor participation, appreciable corporate earnings and a palpable recovery in economic growth have helped benchmark indices to post all-time-high levels this year. The 30-share Sensex is currently trading 96% above trough levels touched in March last year.
Discount brokers such as Zerodha have seen a 100% jump in new account opening in 2020 and have been dishing out incentives for their employees every month based on new customers.
“Some of our best performers can make as much as 20 months of salary as cash bonus at the end of the year,” said Nithin Kamath, founder of Zerodha, one of India’s largest stock broking firms.
He said the company has been rewarding its employees in multiple ways as trading activity picked up significantly during the year. “One of the biggest payouts was through our ESOP buyback at a valuation of $1 billion that we did last year. This year may be we will have to do ESOP buyback at twice of what we did as the business did so well,” Kamath said. “In addition to that, every month we dish out incentives to employees based on new account openings.”
Head of another stock broking company who requested not to be identified claimed that the company will give its best performers – mostly in frontline sales – around 400% of their salary as bonus this year. “For the top 5%, the average bonus will be about 124%,” he said.
Sandeep Bhardwaj, CEO, retail, at IIFL Securities, said the broking industry and his firm did well despite the pandemic. “Being a performance-driven organisation, we believe in consistently rewarding our employees through a strong incentive programme, bonus structure, ESOPs and career progression.”
Head of another brokerage said the company would offer salary increases in the range of 7-18% and bonus of 3-6 months of CTC to top performers this year.
