The stellar performance of Tata Consultancy Services, despite the choppy economic environment, seems to have translated into higher pay packages for the company’s top personnel.
Several upper management officials, both executive and non-executive, have taken hikes of between 14 per cent and 46 per cent in a year where TCS’ annual profits rose by 15.6 per cent (to $2.6 billion) on revenue growth of 13.6 per cent to ($11.6 billion), according to the TCS Annual Report for 2012-13.
N. Chandrasekaran, Chief Executive Officer and Managing Director, saw a 46 per cent increase in overall remuneration to Rs 11.69 crore in 2012-13 from Rs 8.01 crore in the year before.
Little hike in salary
While he took a modest increase of 20 per cent under the salary head, the company doubled his commission to Rs 6 crore this year. “In most cases, top management officials do not take a major increase in the fixed salary component. If the company’s performance has been good, the increase in compensation is reflected on the commissions/bonuses side,” Sunil Goel, Director of GlobalHunt, an executive consultancy and search firm, said.
Vice-Chairman and non-Executive Director S. Ramadorai’s overall remuneration increased by around 25 per cent to Rs 2.51 crore (Rs 2.01 crore).
Cyrus Mistry, who was appointed as Chairman of the company in December 2012, did not take any commission for his services. Mistry being a director in the holding company (Tata Sons), cannot get commissions for his non-executive role in a subsidiary company (TCS), according to a TCS spokesperson. However, TCS paid him sitting fees of Rs 0.7 lakh.
For the erstwhile Chief Financial Officer S. Mahalingam (who retired from the company in February this year), the overall remuneration went up by around 14 per cent to Rs 4.02 crore (Rs 3.53 crore).
In contrast, last year TCS had given out wage hikes of about 4-6 per cent to associates in developing countries and 2-4 per cent in developed countries.
Wages Impact
“Since top management personnel form a fraction of overall employee base, hike in their remuneration does not have a tangible impact on cost structures. On the other hand, even a two per cent hike for employees at the associate level has a telling impact on overall costs,” said Goel.