The salary of Lakshmi Mittal, Chairman and CEO of ArcelorMittal, inched up a mere 1.78 per cent at $1.77 million last year, amid the world’s largest steel-maker reporting a net loss of $3.73 billion in 2012 due to slump in demand and write downs.
Mittal took a 6.41 per cut cent in short-term performance related bonus in 2012 at $1.94 million in the backdrop of recession in Europe hurting ArcelorMittal’s performance last year, the company’s annual report showed.
Mittal’s salary in 2011 was $1.739 million, while his short-term performance related bonus was $2.074 million.
The company’s several other board members also went for cuts in their pay cheques in 2012 due to poor performance of the company.
This includes Mittal’s daughter Vanisha Mittal Bhatia, who went for a 1.15 per cent cut in her compensation at $1,72,000.
The report, however, did not mention the compensation given to Mittal’s son and company’s CFO Aditya Mittal as he is not a board member.
Lakshmi Mittal, along with his wife Usha Mittal holds 39.39 per cent stake in ArcelorMittal.
In 2012, the largest steel producer of the world had reported a net loss of $3.73 billion due to poor market conditions, particularly in Europe, where it had to idle several plants.
This had led to company’s operating profit (EBITDA) and sales declining by 30 per cent and 10.40 per cent, respectively.
The company had already proposed to reduce the dividend for 2013 by about 74 per cent to $0.20 per share against $0.75 per share in 2012.
Lakshmi Mittal, whose annual compensation has risen from $1.65 million in 2010, is the highest paid member of ArcelorMittal’s board, the report showed.
His pay cheque was way ahead of the second best paid Lewis B Kaden, the lead independent director, who received $262,000 in compensation in 2012.
Narayanan Vaghul was the third highest paid board member of ArcelorMittal, with a compensation of $218,000.
Cost cutting by the company was also evident on total compensation paid in 2012 to members of ArcelorMittal’s senior management (including Lakshmi Mittal in his capacity as CEO), where it went for nearly 41 per cent cut at $ 9.6 million in base salaries.
This also included certain other allowances paid in cash, such as allowances relating to car, petrol, lunch and financial services, the annual report said.
Further, ArcelorMittal pruned costs on short-term performance-related variable pay, consisting of a bonus linked to 2011 results by about 64 per cent at $ 10.5 million and reduced pension bill by 47 per cent to $ 0.8 million.