Heads of Tata Group’s various firms are taking up 20 percent pay cuts of up to 20 percent in the wake of the COVID-19 induced lockdown and slump in business growth, said news reports.
The chairman of Tata Sons and chief executive officers (CEOs) of all its operating companies will take an estimated 20 percent cut in their remunerations as the group reportedly started cost-cutting measures for the first time in its history, said a report in The Economic Times.
The compensation of CEOs and managing directors (MDs) of Tata Steel, Tata Motors, Tata Power, Trent, Tata International, Tata Capital and Voltas, among others, will be cut the report said citing company executives.
Tata Sons chairman N Chandrasekaran’s total remuneration during the previous financial year was Rs 65.52 crore which included a Rs 54 crore commission on the profit of Tata Sons, the report said adding his compensation rose by 19 percent as compared to FY18.
The compensation of top executives at TCS, India’s largest software services firm, witnessed a dip during the last fiscal.
“The managerial remuneration for the year decreased by 15 percent. The executive remuneration for FY20 is lower than FY19 in view of the economic conditions. The directors decided to moderate the executive remuneration for this year to express solidarity and conserve resources,” according to the IT giant’s annual report.
TCS chief executive Rajesh Gopinathan’s remuneration declined 16 percent to Rs 13.3 crore and included Rs 1.35 crore in salary, Rs 1.29 crore in perquisites, Rs 10 crore in commission (at 0.02 percent of profit) and over Rs 72.82 lakh in other allowances, reported Business Standard. In 2018-19, his compensation was Rs 16.02 crore.
The payment of TCS Chief Operating Officer N Ganapathy Subramaniam also dipped nearly 13 percent to Rs 10.11 crore in FY20 as compared to Rs 11.61 crore in FY19, the report said,adding Chief Financial Officer Ramakrishnan V took home Rs 3.98 crore in FY20 compared with Rs 4.13 crore the previous year.
Last month, TCS had reported a marginal drop in its consolidated net profit to Rs 8,049 crore for March 2020 quarter. This was against a net profit of Rs 8,126 crore in the year-ago period.
Revenue of Tata IT arm grew 5.1 percent in the quarter under review to Rs 39,946 crore from Rs 38,010 crore in the corresponding period last fiscal, it added.
For the full year (2019-20), net profit was higher by 2.7 percent at Rs 32,340 crore, while revenue increased 7.1 percent to Rs 1,56,949 crore.
“Covid 19 presented us an operational challenge of scale, speed and complexity…It also required recalibrating the project management methodology and the security posture. The outcome was our Secure Borderless Workspaces framework, which has now enabled close to 90 percent of our employees to work remotely and securely,” N Ganapathy Subramaniam, Chief Operating Officer and Executive Director, said.
In November last year, there were reports that Tata Steel had plans to cut up to 3,000 jobs across its European operations, the company said on Monday, as the sector wrestles with excess supply, weak demand and high costs.
Earlier, a source close to the discussions told Reuters around 3,000 people would be affected after the group’s European chief executive Henrik Adam said Tata was planning to announce job cuts across the European business without giving figures.
Updated Date: May 25, 2020 16:37:20 IST