In A First, Tata Group Top Executives To Take 20% Pay Cut

The pay cut would impact the current year's bonuses and the move is expected to set an example while motivating employees and ensure business viability at the same time.

(Representational Photo: Getty images)

New Delhi, May 25: In a first for Tata Group, the top executives would take salary cuts up to 20 per cent, to set an example for others while motivating employees and ensure business viability. According to Economic Times report, the CEOs and MDs of the Tata Group companies including Tata Steel, Tata Motors, TCS, Tata Power, Trent, Tata International, Tata Capital and Voltas including Tata Sons are among the executives who will undertake an estimated 20 per cent cut in compensation. The pay cut was first initiated by TCS, the IT company from the flagship group, as it announced a salary cut for CEO Rajesh Gopinathan. According to the ET report, Indian Hotels has already informed about the deduction of pay in senior leadership who are contributing a percentage of their salary this quarter to support the company in the tough economic conditions. This pay cut has been implemented after reports surfaced that the group may go ahead with the deduction after it witnessed sluggishness in the revenue. However, the pay cut would impact the current year's bonuses as per the business daily. A Tata Steel spokesperson told ET that remuneration decisions are taken by the remuneration committee of the board of Tata Steel and stressed that it might not be right to pre-empt a way forward. The salary of the CEOs in the top 15 Tata Group companies grew around 11 per cent from FY18 to FY19. As per the estimated of the Economic Times, N Chandrasekaran of Tata Sons had received a total remuneration of Rs 65.52 crore, up 19 per cent, for FY19 including a Rs 54 crore commission on the profit of Tata Sons. While TCS CEO Rajesh Gopinathan's remuneration took 16.5 per cent dip to Rs 13.3 crore in the fiscal year ended March 31. Gopinathan had earned Rs 16.04 crore in the previous financial year. It is to be noted that except for TCS, no other Tata company has published its FY20 annual report so far. In its annual report TCS has mentioned that the executive remuneration for FY20 is lower than FY19 in view of the economic conditions impacted by the Covid-19 pandemic.  Meanwhile, Tata Motors CEO Guenter Butschek was paid Rs26.29 crore, the most among group CEOs and 351 times the median remuneration, stated the daily. WATCH: Raipur: Passengers wear PPE kits during air travel