For the first time, Tata Group's top brass to take upto 20% pay cut
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% pay cut as the conglomerate initiates cost-cutting measures.
CEOs and MDs of Tata Steel, Tata Motors, Tata Power, Trent, Tata International, Tata Capital, and Voltas, among others, will have their compensation reduced. The cuts will majorly be made in the current year bonuses.
The move is aimed at leading by example, motivating employees and organizations, and ensuring business viability.
In this direction, TCS, the group’s flagship and its most profitable company, was the first to announce a cut for CEO Rajesh Gopinathan. The IT major stated that its CEO and remuneration shrank 16.5 percent to Rs13.3 Cr in 2019-20 compared to the previous fiscal.
“The managerial remuneration for the year decreased by 15 percent. The executive remuneration for FY 2020 is lower than FY 2019 in view of the economic conditions impacted by the COVID-19 pandemic. The Directors have decided to moderate the executive remuneration for this year to express solidarity and conserve resources," the annual report said.
Similarly, 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”.
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. However, besides TCS, no other unit has published the FY20 annual report so far. The move comes as Tata Sons chairman N Chandrasekaran had earlier stated that each company will review its HR policy, revenue planning, and cash flow management. The tough measures are intended to protect business and lead with empathy as the business gets impacted due to COVID-19.