For the first time ever in the Tata Group’s history, the chairman of Tata Sons and CEOs of all operating companies will take an estimated 20% cut in compensation as a step which initiates cost-cutting measures. The move is aimed at leading by example, motivating employees and organisations and ensuring business viability, insiders said.
CEOs and MDs of Tata Steel, Tata Motors, Tata Power, Trent, Tata International, Tata Capital and Voltas, will have their compensation reduced, executives said. Top officials said the cut would primarily be in current year bonuses.
TCS, the group’s flagship and its most profitable company, was the first to announce a cut for CEO Rajesh Gopinathan.
“These are times never before experienced in the history of our group and it calls for some tough measures to protect businesses,” said a top group CEO seeking anonymity. “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.”
Also, the deductions would be made for the first time ever where a cut for CEO Rajesh Gopinathan would happen. According to sources, Gopinathan’s remuneration dropped 16.5% to Rs13.3 crore in the fiscal year ended March 31 from Rs 16.04 crore in the previous financial year.