Pay­outs of Tata Mo­tors’ bosses drop as turnaround takes ef­fect


Re­mu­ner­a­tion of top ex­ec­u­tives and in­de­pen­dent direc­tors at Tata Mo­tors, in­clud­ing that of its manag­ing di­rec­tor and chief ex­ec­u­tive Guenter Butschek, saw a drop in fis­cal 2018 over the last year amid com­pany’s ef­forts to con­tain costs and turnaround the do­mes­tic op­er­a­tions, ac­cord­ing to its lat­est an­nual re­port.

Ex­clud­ing Butschek, whose to­tal re­mu­ner­a­tion (in­clud­ing perquisites) came down 10 per cent over a year ago, to­tal pay­outs for most of the other ex­ec­u­tives re­mained un­changed even as perquisites fell.

Butschek’s to­tal com­pen­sa­tion, in­clud­ing salary and perquisites, dropped to ~201 mil­lion against ~225 mil­lion a year ago. The re­duc­tion came on back of a steep re­duc­tion in perquisites, which came down to ~8.9 mil­lion from ~13 mil­lion.

Tata Mo­tors ap­pointed Butschek, the for­mer Air­bus and Daim­ler AG ex­ec­u­tive, for the top job in mid-Fe­bru­ary 2016 af­ter a global search that lasted al­most two years. The firm had pro­posed an an­nual pack­age of ~280 mil­lion to ~290 mil­lion per year for him, and the pro­posed re­mu­ner­a­tion was the high­est among CEOs in the auto uni­verse in In­dia.

Un­der his lead­er­ship, Tata Mo­tors has ex­e­cuted a turnaround plan which has started yield­ing re­sults. Sales of com­pany’s pas­sen­ger ve­hi­cles (PV) and com­mer­cial ve­hi­cles (CV) have re­ported a strong growth, boost­ing the un­der­ly­ing prof­itabil­ity and gen­er­at­ing free cash flow af­ter many years. In fis­cal 2018, the mar­ket shares in CV in­creased by 70bps to 45.1 per cent, and by 60bps to 5.7 per cent in PV, Butschek said in a let­ter to the share­hold­ers.

“In FY19, we have an­nounced the launch of ‘Turnaround 2.0’ with three clear ob­jec­tives viz. ‘win de­ci­sively’ in CV, ‘win sus­tain­ably’ in PV and em­bed a cul­ture of ‘Turnaround’ deep into the or­gan­i­sa­tion,” said Butschek.

Satish Bor­wankar, the firm’s chief op­er­at­ing of­fi­cer, also saw a sharp re­duc­tion in his al­lowances to ~1.3 mil­lion from ~8.2 mil­lion even as the to­tal pay­out re­mained the same as last year. The cut was sharper for in­de­pen­dent direc­tors. This is in a sharp con­trast to fis­cal 2016-17, when pay­outs to in­de­pen­dent direc­tors grew over fis­cal 2015-16, de­spite the com­pany be­ing sad­dled with losses.

Re­mu­ner­a­tion of VK Jairath and Fal­guni Na­yar crimped by 22 per cent and 27 per cent, re­spec­tively, in fis­cal 2018 over a year ago. OP Bhatt and Hanne Sore­nen were in­ducted on the board in May 2017 and Jan­uary 2018, re­plac­ing R Mashelkar and Narsee Munji, hence their re­mu­ner­a­tion is not com­pa­ra­ble to last year’s.

Hoshang Sethna, com­pany sec­re­tary, saw the value of perquisites de­crease to ~0.26 mil­lion from ~0.85 mil­lion a year ago even as the to­tal pay­out re­mained un­changed over the last year. C Ra­makr­ish­nan, chief fi­nan­cial of­fi­cer who su­per­an­nu­ated in Septem­ber 2017, got a to­tal re­mu­ner­a­tion of ~42 mil­lion (com­puted for six months). In­ter­est­ingly, P B Balaji, who re­placed him last Novem­ber, re­ceived a much higher pay­out of ~66 mil­lion for the six-month pe­riod.

Tata Mo­tors’ stand­alone net rev­enues in­creased by 31.6 per cent to ~584.57 bil­lion for the 12 months to March 31, 2018 and stand­alone profit be­fore ex­cep­tional items and tax for the year came at ~200 mil­lion, com­pared with a loss of ~20.15 bil­lion in the pre­vi­ous year.

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