For the first time in the Tata Group’s history, the chairman of Tata Sons and CEOs of all operating companies will take an estimated 20% cut in compensation as the conglomerate initiates cost-cutting measures. The move is aimed at leading by example, motivating employees and organisations and ensuring business viability, insiders said.
TCS, the group’s flagship and its most profitable company, was the first to announce a cut for CEO Rajesh Gopinathan. Indian Hotels has already said its senior leadership will “contribute a percentage of their salary this quarter to help with the survival phase of the company”.
CEOs and MDs of Tata Steel, Tata Motors, Tata Power, Trent, Tata International, Tata Capital and Voltas, among others, will have their compensation reduced, executives said. Top officials close to the development said the cut would primarily be in current year bonuses.
“These are times never before experienced in the history of our group and it calls for some tough measures to protect businesses,” said a top group CEO seeking anonymity. “We will do all that it takes to ensure right leadership with empathy. As a culture, the group has always ensured employees down the line are protected as much as can be.”
Tata Sons chairman N Chandrasekaran had told earlier that each company will review its HR policy, revenue planning and cash flow management.
Measures in View of Covid Pandemic
“We will be compassionate and each company will take a decision individually to ensure a viable business,” Chandrasekaran had said.
Tata Sons and most group companies did not respond to an email on the subject. A Tata Steel spokesperson said, “Remuneration is a decision which rests with the remuneration committee of the board of Tata Steel. It therefore may not be appropriate to pre-empt a way forward in the matter.”
CEO remuneration at the top 15 Tata Group companies rose about 11% in FY19 from FY18 on average compared with a 14% jump in FY18 over FY17. Barring TCS, no other unit has published the FY20 annual report so far. However, the data is not strictly comparable as some CEOs joined during the financial year.
Chandrasekaran received a total remuneration of Rs 65.52 crore for FY19, which includes a Rs 54 crore commission on the profit of Tata Sons. His package was 19% higher than in FY18.
On the business front, Tata Group sales of 33 listed companies rose 10% to Rs7.52 lakh crore in FY19. Three companies — Tata Motors, Tata Steel and TCS — contributed nearly 82% of total sales. However, profits of the 33 companies declined 20% in FY19 from FY18. TCS contributed nearly Rs32,340 crore to Tata Group profit, followed by Tata Steel at Rs10,218 crore in FY19.
TCS chief executive Rajesh Gopinathan’s remuneration dropped 16.5% to Rs13.3 crore in the fiscal year ended March 31from Rs 16.04 crore in the previous financial year.
“The executive remuneration for FY20 is lower than FY19 in view of the economic conditions impacted by the Covid-19 pandemic,” said the TCS annual report. He earned 215 times the median remuneration. Tata Motors CEO Guenter Butschek was paid Rs26.29 crore, the most among group CEOs and 351 times the median remuneration.
The company made a loss of Rs28,828 crore in FY19. Tata Steel, which reported a 16% compounded sales growth over three years and 88% profit growth during the period, raised CEO TV Narendran’s salary by 19% to Rs11.23 crore in FY19. Titan and Tata Elxsi, the two best companies as far as growth was concerned, raised CEO remuneration by 15% each in FY19. The CEO pay package at Trent, Tata Chemicals, Rallis India and Tata Coffee rose about 10% in FY19.
- WHO team to visit China next week to investigate origins of coronavirus
- 13 pvt labs in Telangana under govt scanner for reporting abnormal Covid-19+ cases
- Delhi BJP reorganisation process begins; 35 teams formed to shortlist names
- ‘Malicious, unsubstantiated’: Indian Army on reports of PM Modi’s ‘fake hospital visit’
- Nagaland government rejects governor’s proposal on transfer and posting of officials
- Venkaiah Naidu pays tribute to BJP patriarch LK Advani on Guru Purnima
- Strategic affairs experts hail Modi’s visit to Ladakh; say his message to China ‘clear’
- ICMR defends fast tracking Covaxin amid allegations of chasing glory with Independence Day launch
- Working from home? Here are some tips to keep the lockdown pounds off
- Two-time Olympic champion Lin Dan retires from international badminton
- Asked about missing face mask, BJP leader and son thrash UP cops; arrested
- Docetaxel: Chemotherapy drug likely to be less effective in overweight, obese women with breast cancer
- UK FM Rishi Sunak urges British public to help restart economy on ‘Super Saturday’
- ‘Roti-Beti’ tie with India under threat by Nepal’s citizenship amendment bill
- No food, amenities or tourists: Havana stirs to life amid scarcity post lockdown
English12 hours ago
Wife found dead after husband dies in Covid-19 isolation ward in Odisha’s Jagatsinghpur
English13 hours ago
Horoscope Today: Astrological prediction for July 4, what’s in store for Aries, Gemini, Cancer, Leo, Virgo and other zodiac signs
English11 hours ago
Faces of terror: Why India banned 9 Khalistan-linked terrorists in 5 countries
English21 hours ago
Pakistani foreign minister tests positive for Covid-19
English19 hours ago
Hong Kongers scrub social media history in face of security law
English43 mins ago
‘Malicious, unsubstantiated’: Indian Army on reports of PM Modi’s ‘fake hospital visit’
English10 hours ago
Sukhoi vs Sukhoi: India vs China
English23 hours ago
Earthquake of magnitude 4.7 hits Alwar in Rajasthan; tremors felt in north India, Delhi-NCR