New Delhi: IT firm, Tata Consultancy Services Ltd (TCS), has enhanced total pay packages of its top management personnel and board members by over Rs1 crore in the process of giving a better hike to its incoming CEO than his predecessor.
The Tata group entity paid a total remuneration of Rs12.80 crore to its key management personnel and board members during 2008-09, up from Rs11.08 crore in the previous fiscal.
In terms of total package, company’s CEO S.Ramadorai was the highest paid executive with a total remuneration of Rs4.1 crore in the fiscal, according to TCS’ annual report.
Ramadorai’s pay package grew by about 22% from Rs3.37 crore in 2007-08, but it was lower than a hike of 36% for chief operating officer N.Chandrasekaran.
Chandrasekaran, who would replace Ramadorai as TCS CEO later this year, saw his remuneration rise from Rs1.41 crore to Rs1.92 crore.
Executive director Phiroz Vandrevala got the highest pay hike of 41% among the company’s board members as his remuneration rose from Rs1 crore to Rs1.41 crore.
The hike in the remuneration for both Chandrasekaran and Vandrevala exceeded also the increase in the company’s total employee cost of about 25%.
At the same time, Ratan Tata, TCS’s non-executive chairman, saw his remuneration, comprising of a commission and sitting fees for board members, unchanged at Rs55.6lakh.
The company has identified cost reduction as one of its focus areas. Its ‘other operating expenses´ fell to 14.58% of revenue in 2008-09, from 16.37% in the previous fiscal, primarily due to reduction in costs related to software and hardware, recruitment and training and travel and conveyance.
Interestingly, TCS’s chief financial officer S.Mahalingam got a lesser total remuneration of Rs1.7 crore in 2008-09, as against Rs2.31 crore in the previous year.
TCS said that it pays remuneration by way of salary, benefits, perquisites and allowances and commission to its MD and executive directors and the annual increments are effective 1 April, each year.
During 2008-09, TCS paid sitting fees of Rs10,000 per meeting to its non-executive directors for attending meetings of the board as also that of the board committees.
Besides, the company also pays commission to non-executive directors within a ceiling of 1% of net profit and also reimburses the out-of-pocket expenses incurred by the board members for attending meetings.
TCS CEO and MD Ramadorai was paid a salary of Rs76.20 lakh, benefits, perquisites and allowances of Rs83.35 lakh and commission of Rs2.5 crore in 2008-09.
At the same time, the incoming CEO Chandrasekaran got Rs27.43 lakh as salary, Rs34.66 lakh as benefits, perquisites and allowances and Rs1.3 crore as commission.