Although the recession has forced the IT industry to resort to layoffs and other cost-cutting measures, this hasn't stopped the country's top IT firm Tata Consultancy Services from raising the pay of its top management and board members by a total of over Rs1 crore.
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, according to its annual report.
In terms of total package, chief executive S Ramadorai was the highest paid executive with a total remuneration of Rs 4.1 crore in the fiscal. 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 chief executive 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 per cent among the company's board members. His remuneration rose from Rs1 crore to Rs1.41 crore.
The hike in the remuneration for Chandrasekaran and Vandrevala together exceeded the increase in the company's total employee cost of about 25 per cent.
Non-executive chairman Ratan Tata saw his remuneration, comprising of a commission and sitting fees for board members, unchanged at Rs55.60 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 owing 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, against Rs 2.31 crore in the previous 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.
The seven non-executive directors, including Ratan Tata, together were paid total commission of Rs3.6 crore, up from Rs3 crore in the previous fiscal.
At the same time, the sitting fees of these seven directors rose to Rs700,000 from Rs600,000. In total, the non-executive directors were paid a total remuneration of Rs3.67 crore while key management personnel and whole-time directors were together paid Rs9.13 crore.