Tata Group top execs to take up to 20% salary cut in an effort to conserve cash
For the first time in the Tata Group’s history, Tata Sons chairman N Chandrasekaran and Tata Group companies’ chief executive officers (CEOs) will take around a 20 percent compensation-cut in an effort to reduce the cost to tide over the economic impact of the COVID-19 crisis.
Pay package of Tata Consultancy Services (TCS) CEO Rajesh Gopinathan has already been slashed by over 16 percent to Rs 13.3 crore in 2019-20 compared to the previous fiscal, as per the company’s annual report. Indian Hotels has said its top management team will give 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. Top officials close to the development to media that the cuts would primarily be in current year bonuses.
The main purpose behind taking pay-cut is to lead by example and boost the morale of employees in the time of the coronavirus-induced crisis.
Remuneration of CEOs at the top 15 Tata Group firms jumped about 11 percent in FY19 from FY18 on average in comparison to a 14 percent surge in FY18 over FY17. Apart from TCS, no other entity has published the FY20 annual report so far. However, the figures are not strictly equivalent as some chief executives joined during the financial year.
Chandrasekaran received a total pay package of Rs 65.52 crore for FY19, which includes a Rs 54 crore commission on the profit of Tata Sons. His remuneration package was 19 percent higher than in FY18.
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