COVID-19 Impact: For the first time in Tata Group’s history, top management to take a 20% pay cut

The chairman of Tata Sons and the CEOs of all companies under Tata Group will take an approximately 20% pay cut as part of the Conglomerate’s cost-cutting measures. This has happened for the first time in the group’s history. It is aimed at motivating its employees and organisations and ensuring the viability of its operations. It is termed as a leading by example move.

Tata Group’s most profitable and flagship company, TCS, became the first to announce a cut for CEO Rajesh Gopinath. Indian Hotels previously announced that its senior management will, “contribute a percentage of their salary this quarter to help with the survival phase of the company.”

Advertisement

CEOs and MDs of Tata Motors, Tata Steel, Tata Power, Trent, Tata Capital, Tata International and Voltas, among other top management, will receive lesser compensation. The cut would be primarily in the bonuses of the current year, top officials said.

A Tata group CEO, who chose to remain anonymous, said in conversation with ET, “These are times never before experienced in the history of our group and it calls for some tough measures to protect businesses. We will do all that it takes to ensure right leadership with empathy. As a culture, the group has always ensured employees down the line are protected as much as can be.”

N Chandrashekharan told ET, “We will be compassionate and each company will take a decision individually to ensure a viable business.” He said that each company will conduct a review on its Cash Flow, HR policy and revenue planning.

A Tata Steel spokesperson told ET, “Remuneration is a decision which rests with the remuneration committee of the board of Tata Steel. It therefore may not be appropriate to pre-empt a way forward in the matter.”

The annual report of TCS said, “The executive remuneration for FY20 is lower than FY19 in view of the economic conditions impacted by the Covid-19 pandemic.”