The country's top IT firm, TCS, has enhanced total pay packages of its top management personnel and board members by over Rs 1 crore — in the process giving a better hike to its incoming CEO than his predecessor.
The Tata group entity paid a total remuneration of Rs 12.80 crore to its key management personnel and board members during 2008-09, up from Rs 11.08 crore in the previous fiscal.
In terms of total package, CEO S Ramadorai was the highest paid executive with a total remuneration of Rs 4.1 crore in the fiscal, according to TCS' annual report.
Ramadorai's pay package grew by about 22 per cent from Rs 3.37 crore in 2007-08, but it was lower than a hike of 36 per cent for Chief Operating Officer N Chandrasekaran.
Chandrasekaran, who would replace Ramadorai as TCS CEO later this year, saw his remuneration rise from Rs 1.41 crore to Rs 1.92 crore.
Executive Director Phiroz Vandrevala got the highest pay hike of 41 per cent among the company's board members as his remuneration rose from Rs one crore to Rs 1.41 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 per cent.
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 Rs 55.60 lakh.
The company has identified cost reduction as one of its focus areas. Its 'other operating expenses' fell to 14.58 per cent of revenue in 2008-09, from 16.37 per cent 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 Rs 1.7 crore in 2008-09, as against Rs 2.31 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 April 1, each year.
During 2008-09, TCS paid sitting fees of Rs 10,000 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 one per cent 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 Rs 76.20 lakh, benefits, perquisites and allowances of Rs 83.35 lakh and commission of Rs 2.5 crore in 2008-09.
At the same time, the incoming CEO Chandrasekaran got Rs 27.43 lakh as salary, Rs 34.66 lakh as benefits, perquisites and allowances and Rs 1.3 crore as commission.
The seven non-executive directors, including Ratan Tata, together were paid total commission of Rs 3.6 crore, up from Rs 3 crore in the previous fiscal.
At the same time, the sitting fees of these seven directors rose to Rs 7 lakh from Rs 6 lakh.
In total, the non-executive directors were paid a total remuneration of Rs 3.67 crore, while key management personnel and whole-time directors were together paid Rs 9.13 crore.
