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| L N Mittal takes 12% pay cut in 2009 |
| Press Trust of India / New Delhi Feb 23, 2010, 20:47 IST |
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World's largest steel maker ArcelorMittal's Chairman and Chief Executive Offiver Lakshmi N Mittal has taken 12 per cent pay cut in 2009 while the collective compensation paid to board members has fallen by 23 per cent.
"In connection with the board of directors' decision in February 2009 to reduce its compensation in light of conditions in the steel market, Group Management Board members voluntarily decided to reduce their salary by 12 per cent (including Mittal's)," the firm said in its annual report.
On account of the slump in steel demand, ArcelorMittal posted losses in the first and the second quarter of 2009 and resorted to cost cutting to tide over the crisis.
Mittal was paid around $3.6 million in 2009 against $4.1 million in 2008.
His other peers on the board, including Vanisha Bhatia, Narayanan Vaghul and Wilbur Ross, received a total of $2.7 million in 2009, about 23 per cent lower pay than their remunerations of 2008. This was on account of extra payout in form of $2.1 million performance incentive to Mittal.
Besides the board, the company's managing committee which comprises likes of India CEO Vijay Bhatnagar and the steel maker's Human Resource Head Bikram Agarwal, took a pay cut of 10 per cent against their 2008 remunerations. However, their comparative salary was not given.
"...The members of the Management Committee voluntarily decided to reduce their salary by 10 per cent, compared to the previous year," the report added.
In its attempt to tide over the economic crisis, the company last year decided to reduce the compensation paid to its senior management.
"On February 10, 2009, the board of directors decided that it would propose to the next annual general meeting of shareholders to reduce the annual compensation of board members... (including that of the chairman and chief executive officer) by 15 per cent compared to the previous year as an additional measure in light of prevailing difficult conditions in the steel industry... The proposal was approved by the annual general meeting held on May 12, 2009," the report added.
The company has saved $2.7 billion in 2009 through various cost cutting and is targeting to save around $5 billion by 2012. During the economic crisis of last financial year, ArcelorMittal had initiated several temporary and permanent cost-cutting measures.
"It will come as no surprise to you that 2009 was not only the most challenging year since the creation of ArcelorMittal but also the most difficult period. Looking ahead to the remainder of 2010, I am certainly more optimistic than I was 12 months ago. The crisis has been very difficult for all of us," Mittal said in the report.
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