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| LN Mittal, ArcelorMittal top exec to take 15% pay cut |
| Press Trust of India / London May 24, 2009, 13:23 IST |
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NRI billionaire Lakshmi Niwas Mittal, along with his son Aditya and daughter Vanisha, will see a 15 per cent decline in salaries for their roles at ArcelorMittal, as the steel maker's top brass takes a pay cut in an added effort to contain cost this fiscal.
"In view of the current economic circumstances in general and in the steel industry in particular, the board decided on February 10, 2009, to propose to reduce the annual remuneration for board members for the year 2009 by 15 per cent.
"The company believes in solidarity and a 15 per cent unanimously agreed cut by senior management was a reflection of the same. This measure was limited to the senior level positions -- Vice-Presidents and above," a spokesperson for the world's largest steel maker said in an email response.
The proposal was approved at company's Annual General Meeting in Luxembourg earlier this month.
With the latest plan, Lakshmi Mittal, one of the world's richest man, would see his remunerations as ArcelorMittal's Chief Executive Officer (CEO) fall 15 per cent from last year.
"During 2008, L N Mittal received a base annual salary of $1,916,000, a performance-related cash bonus of $2,200,000 and 60,000 stock options," the spokesperson said.
According to the official, Lakshmi Mittal is paid as CEO and "there is no additional payment for his position as chairman of the board".
The other board members including Vanisha and Wilbur Ross would see a reduced annual remuneration of euro 102,000.
"Members of the board of directors normally receive an Annual Remuneration of euro 120,000 plus an attendance fee of euro 2,000 per meeting attended," the spokesperson said, adding the 15 per cent cut would be taken on the annual remuneration.
Moreover, the steel giant has trimmed its board size by four directors to 12 in view of the prevailing circumstances.
In its bid to tame the economic crisis, which has resulted in consecutive quarterly losses to the company, ArcelorMittal will continue with its measures like production and job cuts, the trimming of salaries, all aimed at saving $2 billion in its cost-cutting drive for 2009.
The steel firm envisages trimming its workforce by over 9,000 through voluntary redundancies and cutting production by almost half. Earlier this month, the company had announced temporary lay-off about 1,000 workers at one of its mills in the US.
ArcelorMittal has posted a loss of $1.1 billion for the first quarter ended March 2009. The consecutive quarterly losses were primarily on account of the slump in steel demand amid the global industrial slowdown. Steel prices crashed by almost 50 per cent to the current $400-500 a tonne from the early 2008 levels.
The company had posted a net income of $2.4 billion in the first quarter of the previous fiscal.
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