IIM Rohtak director got Rs 3.2 crore variable pay; CAG raises transparency concerns

The CAG has flagged a payment of Rs 3.20 crore in variable pay to IIM-Rohtak director Dheeraj Sharma , saying the institute retrospectively applied regulations to approve the amount "in violation of transparency and statutory procedures". The premium business school failed to produce performance records or evidence that the director recused himself from discussions on his own compensation, the Comptroller and Auditor General (CAG) of India said.

The payment covered 2018-19, 2019-20 and 2020-21, even though the regulations governing the director's variable pay came into effect only on October 25, 2021, the audit report tabled in Lok Sabha on Wednesday said. The audit also found that approvals for variable pay in 2021-22 and 2022-23 lacked key documents, including the performance matrix, evaluation reports and confirmation of consultation with the Central government nominee.

The CAG said the IIM Act, 2017, entitles the director to variable pay based on performance objectives specified in the regulations and empowers the board of governors to frame such regulations. The IIM-Rohtak regulations require the board to develop and convey a performance matrix for the director, on the basis of which variable pay is to be determined. They also require the director to recuse himself from matters involving conflict of interest. A review of the board's agendas and minutes revealed "several procedural deficiencies" in the approval of the director's variable pay, the CAG said.

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Between October 2018 and December 2020, the board discussed the director's variable pay on several occasions, including meetings where the issue was not part of the pre-approved agenda and periods when the board was not constituted as required under the IIM Act. "On several occasions, specifically the 39th, 41st, 42nd, 44th and 48th meetings, there was no recorded evidence that the director recused himself from discussions on his own compensation," the report said. The board approved variable pay for 2018-19, 2019-20 and 2020-21 based on parameters recommended by a nomination and remuneration committee, but the institute could not produce the performance targets, supporting calculations and evaluation documents for audit, it said.

The CAG said IIM-Rohtak retrospectively applied the regulations that became effective on October 25, 2021, while approving and disbursing Rs 3.20 crore, including TDS, for the three preceding years. "These payments were not aligned with the regulatory framework, which does not permit retrospective application of performance objectives determined under the regulations," it said. "In the absence of recorded performance targets, evaluation data and supporting documents, the payment of variable pay lacked transparency and did not conform to the procedures mandated under the Act and the regulations," the report said.

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Panel flags distribution of gifts

The Ministry of Education, in its April 2026 reply, concurred with the audit observations and said the variable pay was not supported by regulatory provisions and proper documentation. The ministry said the amount paid as variable pay during 2018-19 to 2024-25 should be recovered. The audit separately flagged Rs 7.49 crore paid to faculty as incentives and honorarium between 2019-20 and 2023-24. Of this, Rs 4.11 crore was paid as incentives for teaching beyond minimum workload, executive education and consultancy projects, while Rs 3.38 crore was paid as honorarium for admissions, question-paper setting and evaluations. Payments exceeded 100 per cent of regular salary in six cases, the CAG said.

It also flagged distribution of iPhones, iPads, laptops, treadmills, fitness bikes and smartwatches costing Rs 58.32 lakh as honorarium or gifts during 2020-21 and 2021-22. IIM-Rohtak said its faculty incentive and honorarium policy was aligned with those of other IIMs and that the decisions were board-approved. It also said devices issued during the Covid-19 period were for official use and honorarium items were reflected in taxable income with TDS. The CAG noted that the institute had not provided any Ministry of Education norms authorising such payments or distribution of high-value items.

"Payments exceeding 100 per cent of salary, coupled with gifts and unrestricted incentives for routine duties, are inconsistent with the basic principles of FR 46(b) and with prudent financial management," it said. The CAG also noted that a salary of Rs 88.64 lakh was paid to 10 individuals without complete recruitment records. Sharma, who has headed IIM-Rohtak since 2017, is already under government scrutiny over allegations that he misrepresented his educational qualifications while securing his first term as director of IIM-Rohtak in 2017.