Several board members of engineering and construction giant Larsen & Toubro took voluntarily steep pay cuts in their salary in FY20 due to the COVID-19 Pandemic and its adverse impact on business.
- L&T Chairman A M Naik took a 24 percent pay cut.
- L&T CEO and MD SN Subrahmanyan took a pay cut of 43.91 percent
- L&T CFO Shankar Raman also took a salary cut of 47.33 percent
“The report said the Covid-19 impact on L&T’s revenues at Rs 1,800 crore and on net profit at Rs 400 crore in Q4 ended March 31″
In its annual report, the company said “the reduction in managerial remuneration was mainly due to cost reduction measures voluntarily adopted by executive directors in light of the current pandemic scenario.”
And in its next annual general meeting (AGM) which is scheduled for August 13, the company will discuss and is likely to approve of a fundraising resolution to the tune of Rs 4,500 crore through various sources such as qualified institutional placement (QIP).
In the report, L&T Chairman A M Naik said: “The pandemic and its fallout makes it difficult to forecast the future with certainty.” He said it was premature to predict any business outcome.
“While we hope the second half of 2020-21 will herald better economic and business activity in terms of tendering, good liquidity, as well as the revival of labour and supply chains, it would be premature to predict the company’s business outcomes,” he said in the letter, in the FY20 annual report.
He, however, said that there were opportunities in the areas of government buildings, data centres, healthcare infra, airports, metro rail, water projects, hydel projects, expressways, and hydrocarbon (onshore and offshore) projects.
According to the annual report, the average percentage increase in staff salaries — other than the managerial personnel — at 4.7 per cent for FY20. Managerial remuneration, the report added, declined 42.21 per cent.
For the quarter ended 31 March 2020, the impact due to COVID-19 on the company’s revenues and net profits were approximately Rs 18 bn and Rs 4 bn, respectively.
This was due to stoppage of work in almost all the sites for the last part of March 2020 as well as the disruption to the last mile work, like physical inspection, customer clearance, etc that could not be completed due to lockdown restrictions,” the company said in a regulatory filing.