Management Analysis of Bank of Baroda

NSE: BANKBARODA

Shri Debadatta Chand Managing Director & CEO	Served as the Executive Director at BoB from March’21 to June’23 and after that as MD & CEO of BoB w.e.f. July’23. In their capacity as Executive Director, he managed Corporate & Institutional Credit, Corporate & Institutional Banking, Treasury & Global Markets, Mid-Corporate Business, and Trade & Foreign Exchange. In addition, he successfully oversaw the international banking business, domestic subsidiaries/joint ventures, wealth management, capital markets, and NRI business.
Shri Ajay K. Khurana Executive Director	Director at National Payments Corp. of India Ltd., Baroda Global Shared Services Ltd., and Baroda Sun Technologies Ltd. He served as an Executive Director at Syndicate Bank Ltd. from 2018 to 2020 and at BoB from 2020 to 2024. He also held the position of General Manager at Vijaya Bank Ltd.
Shri Lalit Tyagi Executive Director	Having started his career as a Probationary Officer in BoB in 1996, has over 28 years of rich experience in various spectrums of commercial banking, particularly in Corporate Finance, Risk Management, International Banking, and Administrative Roles. He has been an operational banker having vast experience working in different branches/ offices in India and abroad, including two stints in the Bank’s overseas operations; viz. Brussels, Belgium, and New York, USA.
Shri Sanjay Vinayak Mudaliar Executive Director	Took charge as Executive Director of BoB w.e.f. 31st January, 2024. Before this, he was Executive Director at the Indian Overseas Bank (IOB). Shri Mudaliar is a postgraduate in Science & Technology and a Certified Project Management Practitioner from London. He is a seasoned banker with a career spanning over 30 years across industries and financial institutions. Of these, he has been associated with BoB for over 25 years in various capacities across the country and the United Kingdom.
Shri Lal Singh   Executive Director	Joined BoB as an Executive Director on October 9, 2023. He started his career as a Rural Development Officer at the Union Bank of India in 1990. As a career banker, he has 33 years of deep and distinguished experience including MSME Credit, Corporate Finance, Rural and Agri-Business, and Human Resource Development.
Shri Mukesh Kumar Bansal GOI Nominee Director	Currently serving as a Director at National Insurance Co. Ltd., National Credit Guarantee Trustee Co. Ltd., Micro Units Development & Refinance Agency Ltd., and as a Joint Secretary-Financial Services Department at India Ministry of Finance. Member of the Institute of Actuaries of India. Previously, he worked as the Chief Executive Officer at Naya Raipur Development Authority. He also served as a Director at IFCI Ltd. from 2023 to 2024 and as a Non-Executive Director at BoB from 2022 to 2024. Completed his MBA degree from MIT Sloan School of Management.
Smt. Parvathy V Sundaram RBI Nominee Director	Sundaram has been appointed as the RBI Nominee Director on the Board of the Bank vide the Government of India notification dated 13th April 2021 under section 9 of the Banking Companies (Acquisition and Transfer of Undertaking) Act. Smt. Parvathy V Sundaram started her career as a commercial banker, She served as the Executive Director in charge of the Currency Management and Legal Departments of the Reserve Bank of India.
Shri Ajay Singhal Independent Director	Served as a Chairman of the Gwalior Branch of CIRC of the Institute of Chartered of India in the year 2016-17. Served as an Independent Director in the Balmer Lawrie Investment Ltd. from Aug 2018 to July 2021 and also chaired the Audit Committee of the Board. Mr. Singhal was also an Executive Council Member of Barkatullah University, Bhopal appointed by the Hon’ble Governor of Madhya Pradesh. He is an Executive Member of the Madhya Pradesh Chamber of Commerce & Industries Gwalior.
Shri Alok Vajpeyi Shareholder Director	Currently serving as a Director at National Insurance Co. Ltd., National Credit Guarantee Trustee Co. Ltd., Micro Units Development & Refinance Agency Ltd., and as a Joint Secretary-Financial Services Department at India Ministry of Finance. He is also a Member of the Institute of Actuaries of India. Previously, he worked as the Chief Executive Officer at Naya Raipur Development Authority. Served as a Director at IFCI Ltd. from 2023 to 2024 and as a Non-Executive Director at BoB from 2022 to 2024. Mr. Bansal completed his undergraduate and MBA degrees from MIT Sloan School of Management.
Smt. Nina Nagpal Shareholder Director	Joined as a Director on our Board w.e.f. 24th December, 2023 representing shareholders of the Bank for a period of -3- years. Before joining the BoB Board, she was the Managing Director & CEO of Citicorp Finance India Ltd (CFIL), a Non-Bank Finance Company (NBFC) of Citigroup. She was also a Nominee Director on the Board of India Infra Debt Limited (IIDL). Before joining Citigroup in 2014, Smt. Nina Nagpal was the Managing Director and Country Chief Operating Officer of Morgan Stanley India and the CEO of its NBFC. Earlier, she was part of the leadership team at OTC Exchange of India, India’s first electronic stock exchange.

Directors' Qualification: The Board of Directors of BoB comprises individuals with diverse and highly qualified backgrounds, ensuring effective governance and strategic oversight. Typically, their qualifications and expertise align with the requirements of the banking sector, including financial management, risk assessment, governance, and regulatory compliance.

Board Efficiency: The attendance of the Board members at the meetings of BoB during FY23-24 demonstrates a high level of commitment. The Board met seventeen times, and all members maintained an average attendance of 95% over the last years, underscoring the efficiency of the Board. This high attendance reflects strong engagement by the Board in the governance of the company.

Audit and Nomination Committee Composition: The Audit Committee of BoB is chaired by Smt. Soundara Kumar with the other members being Shri Srinivasan Sridhar and Shri Alok Vajpeyi, also Independent Directors.  The Nomination and Remuneration Committee is chaired by Shri Alok Vajpeyi (Chairman), Dr. Hasmukh Adhia, Smt. Soundara Kumar and Srinivasan Sridhar. Like the Audit Committee, no management personnel are part of this committee, ensuring objective evaluations and decisions regarding board nominations and executive remuneration.

Related Party Transactions and Managerial Outflow: BoB has demonstrated transparency in its handling of related party transactions for FY24. A detailed review of the financial statements shows the following outflows to managers and their relatives.

Remuneration of Board of Directors

● Key Changes in Individual Remunerations: Shri Sanjiv Chadha (MD & CEO) His remuneration showed a notable increase from ₹54,25,881 to ₹2,20,49,762 in FY2023-24.The rise is attributed to the inclusion of retirement benefits, indicating a one-time adjustment rather than a regular salary increase.

● Shri Lalit Tyagi (Executive Director): His salary increased from ₹15,64,799 to ₹41,78,508, reflecting his appointment as Executive Director (effective November 21, 2022). The FY2022-23 remuneration covered only the remaining months of the financial year, accounting for the proportional difference.

● Non-Executive Directors’ Remuneration - Sitting Fees: Non-Executive Directors receive sitting fees with a median of ₹25,00,000, and the range varies from ₹6,25,000 to ₹25,00,000.

● Median and Range of Remuneration: The median remuneration for the Board of Directors is ₹41,21,675, highlighting a balanced central tendency in compensation levels. The range of remuneration spans from ₹9,24,054 to ₹2,20,49,762, reflecting significant variability tied to factors such as role designation, tenure, and additional benefits.

Commentary

The heads of BoB during their respective time as MD & CEO received a total compensation of around ₹48 lakh during their tenure. This figure positions them favorably within the public banking sector's compensation landscape. It surpasses the average for public bank heads, which stands at ₹37.7 lahks per year, and aligns with the earnings of top executives at Punjab National Bank (₹48.34 lahks) and Indian Overseas Bank (₹48.09 lakh). Interestingly, IOB's CEO experienced a substantial 38.55% salary increase from FY22 to FY23, suggesting an upward trend in executive compensation within this sector.

Managerial Remuneration Analysis

Particulars	FY20	FY21	FY22	FY23	FY24
Revenue (in Cr.)	78,895	74,314	73,385	94,503	118,379
Revenue Growth %		-5.81%	-1.25%	28.78%	25.26%
Interest expense (in Cr.)	50,040	43,201	38,815	49,942	69,899
GP (in Cr.)	28,855	31,113	34,570	44,561	48,480
GP%	36.57%	41.87%	47.11%	47.15%	40.95%
Managerial Remuneration (in Rs.)	21,924,770	24,346,807	23,109,116	37,453,619	43,298,627
MR Growth %		11.05%	-5.08%	62.07%	15.61%
MR% of Revenue	0.0028%	0.0033%	0.0031%	0.0040%	0.0037%
MR% of Gross Profit	0.0076%	0.0078%	0.0067%	0.0084%	0.0089%

Commentary

Percentage of Revenue: MR as a percentage of revenue remains consistently low, ranging from 0.0028% in FY20 to 0.0037% in FY24. This reflects the bank's focus on maintaining a balanced remuneration policy, even as absolute remuneration grows. The slight rise in the percentage in FY23 corresponds with improved financial performance.

Percentage of Gross Profit: MR as a percentage of gross profit shows a gradual increase from 0.0076% in FY20 to 0.0089% in FY24. This indicates that while managerial payouts have grown, they remain proportionate to the bank's profitability.

The substantial increase in managerial remuneration from FY23 aligns with the bank's revenue growth (28.78%) and gross profit improvement, showcasing a performance-linked remuneration structure. The relatively stable ratios of MR to revenue and gross profit highlight the bank’s commitment to prudent management of executive compensation in relation to its financial performance.