Hitesh Kumar Sethia, the MD and CEO of Jio Financial Services Limited, the non-banking finance company expected to disrupt the banking and financial services industry, is getting an annual compensation package that ranges from Rs 3.30–6.50 crore. But that's not all! This ex-ICICI banker is also in line for a performance-driven bonus, a whopping 250 per cent atop his fixed salary.
According to available information, Sethia’s compensation package is structured with a fixed annual salary that falls between Rs 3.30 crore and Rs 6.50 crore. In addition, Sethia, who joined in July this year, is also eligible for variable compensation. This variable pay can amount to as much as 250 per cent of his fixed salary, which will be linked to his performance.
HDFC Bank CEO Sashidhar Jagdishan received an annual remuneration of Rs 10.55 crore in 2022-23. Sandeep Bakshi, the CEO of ICICI Bank, had an annual take-home of Rs 9.57 crore. Not far behind, Amitabh Chaudhry of Axis Bank earned Rs 9.76 crore during that period.
While Sethia’s compensation might not align directly with the take-home of these top-tier private banking CEOs, the compensation clearly indicates the size and scale of the business Jio Financial will be building in the months to come.
Jio Financial Services, formerly known as Reliance Strategic Investments, is positioned as a large non-banking finance company. It will be operating as a holding company with a web of consumer-centric subsidiaries and associate firms in areas like lending, payment processing, insurance broking, and asset management.
Sethia has to steer the ship with a strategy of growing organically, using the partnership model to leverage the strengths of joint venture partners, and also innovating and making acquisitions to acquire technology, products, and geography.
In fact, navigating the competitive banking and financial services landscape won't be a journey for the country's largest private-sector conglomerate. The financial services industry is quite broad-based, including lending, advisory, insurance (both general and life), mutual funds, payments, distribution, and private equity, among others. Each of these segments comes with its own set of regulatory bodies and challenges.
In the cut-throat lending space where Jio aims to make its mark, there are two big players: banks and NBFCs. Banking, in particular, is a licensed domain. In the last two decades, there have been four entities that got licenses. These are Bandhan Bank, IDFC First, Kotak, and Yes Bank.
While Jio Financial's entry into full-fledged banking might seem distant, the Reliance Group already holds a payment banking license. However, this differentiated license restricts any lending activities. Even if the RBI were to permit industrial conglomerates into banking and Jio were to secure a license in, say, the next 3-5 years, they would be entering a very competitive space where SBI, HDFC, and ICICI of the world rule in mortgages, car loans, corporate, MSME, and agricultural loans.
Sethia, a chartered accountant by profession, comes with strong credentials. He has completed an advanced management program at Harvard Business School. In fact, the doyen of the financial world, K V Kamath as chairman, is there to guide the new team.
With over two decades of experience, Sethia’s expertise spans strategy development, market expansion, compliance, and risk management. He played a pivotal role in establishing and expanding ICICI Bank's presence globally, being a foundational member of the bank's Canadian and German operations. He was also assigned senior roles in the UK and Hong Kong branches of the private bank. In his last role with the Mumbai headquartered bank, Sethia led the transaction banking division.
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