CAG recommends uniform and fiscally prudent framework for variable pay to IIM directors
The Comptroller and Auditor General (CAG) has recommended the Ministry of Education establish a uniform, transparent and fiscally prudent framework for paying variable bonuses to directors at India's Institute of Management (IIM) institutions. The audit found procedural and regulatory flaws in the approval of Rs 3.2 crore in variable pay for IIM Rohtak director Dheeraj Sharma over 2018-2019, 2019-2020, and 2020-2021.
The IIM Act 2017 allows directors to receive variable pay based on specified performance objectives, and the board must frame regulations determining those objectives. However, IIM Rohtak's regulations did not come into effect until October 2021, while Sharma's pay covered three years prior. The CAG pointed out irregularities, including the board deliberating on Sharma's pay during meetings not on pre-approved agendas and without proper recusal due to conflicts of interest.
It recommended the Ministry consider a standardized framework for variable pay across IIMs and ensure proper documentation of performance benchmarks and supporting data.
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