When work is a hobby, one rarely takes leaves. This is true of Larsen and Toubro's Group Executive Chairman AM Naik who is all set to receive Rs 32.21 crores for accumulated past service leaves for his 52 years of service at L&T.
Naik will now be taking up the role of non-executive chairman for three years from October 1st this year, after his retirement on the 30th of September.
Apart from Rs 32.21 crores in leave encashment, Naik’s perquisites stand at Rs 19.27 crores, and a commission of Rs 18.24 crores. "Perquisites include perquisite value related to employee stock options exercised during the year in respect of stock options granted over the past several years by a subsidiary company," the infrastructure major said in the annual report. In total, Naik will be receiving a sum of Rs 78.91 crores for 2016-17.
Companies have been saying no to leave encashment in the last decade to encourage employees to take their leaves to enable them to have ‘work-life balance’. In majority of companies (both Indian and MNCs) sick leaves are not cashable along with casual leaves while earned leaves have limits on encashment to avoid increasing liabilities for the organization.
However, many organizations allow leave encashment on retirement (like in Naik’s case), where employees who retire in the organization get additional financial benefits for post-retirement expenses.
Time to relook at your leave policy and just make sure you are accounting for liabilities that can emerge for the organization, either on exit or retirement.