The top brass of Tata Consultancy Services seem to have monetarily benefited the most from the stellar performance of the company in the last financial year.
Company chairman Mr Ratan Tata's compensation from TCS increased almost three times to Rs 2.48 crore from Rs 81.3 lakh in the previous financial year. For top management officials, the increase in compensation is largely driven by the spike in commissions paid to them.
“The advantage of having a performance-linked pay structure is that the top employees of the company get commissions that are linked to the revenue growth and profitability of the enterprise,” said Mr Sunil Goel, Director of GlobalHunt, an executive search firm.
A case in point is Mr N. Chandrasekaran, Chief Executive Officer and Managing Director, whose overall pay increased by 78 per cent last year to Rs 5.3 crore from Rs 2.97 crore the previous year.
The increase in his remuneration rise was largely on account of a 100 per cent jump in commission to Rs 4 crore from Rs 2 crore. However, it may be noted that Mr Chandrasekaran' salary is not strictly comparable with the previous year, since he was Executive Director and Chief Operating Officer till October 5, 2009, before taking over as Chief Executive Officer and Managing Director on October 6, 2009 for five years.
The Vice-Chairman and Non-Executive Director, Mr S. Ramadorai – a TCS veteran of over 35 years – saw his overall remuneration (in his non-executive role) jump to Rs 1.61 crore from Rs 35.7 lakh in the previous year.
Even Mr Ramadorai's compensation is not comparable with the previous year since he was CEO and Managing Director till October 5, 2009. He had drawn Rs 3.61 crore for the period between April 1 and October 5. After vacating the CEO's office, Mr Ramadorai was inducted as Vice-Chairman and non-executive director on the company's board for which he was paid Rs 35.7 lakh, a combination of commissions and sitting fees.
TCS and Cognizant have been outpacing competitors such as Infosys and Wipro for the last several quarters.
“TCS has developed a reputation for superior execution and that is why it is seeing traction with customers. The company has managed to drive processes that insulate the quality of services rendered to clients from vagaries such as attrition, technology changes etc,” Mr Vikash Jain, Partner of outsourcing advisory firm Everest Group, had told Business Line recently.
For the full year ended March 31, 2011, TCS' net profit grew by 29.5 per cent to Rs 9,068 crore (Rs 7,001 crore) while revenues grew 24.3 per cent to Rs 37,325 crore (Rs 30,029 crore).