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| Variable pay for Satyam staff post restated accounts |
| Press Trust of India / Hyderabad Feb 12, 2009, 15:08 IST |
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Employees of the embattled Satyam Computer may be getting their February salaries but have to wait till the re-statement of the company accounts is done to get a part of their variable pay, which is linked to the company's performance.
"Restatement of financials is the key to variable compensation payout. The variable pay for the quarter is yet to be determined as the results are not announced," a source close to the company said.
"We have variable pay as part of salary (since July 2006) and it is dependent on organisation/circle and business performance. Variable pay varies between 10 (and) 30 per cent of (an) individual's total package offshore and (between) 5 and 15 per cent onsite," the person added.
However, of that (the variable component) 25 per cent is guaranteed pay, which has been paid, and the rest is performance-oriented, which is yet to be ascertained, meaning a Satyam employee offshore has to forego about 22 per cent of his/her salary and an employee onsite 11 per cent, before the accounts are restated.
The newly appointed Chairman of Satyam Computer Services, Kiran Karnik, had said the company will be able to pay salaries for February and will get bank loans in the next few days.
The total variable pay outflow is about 7 per cent of Satyam's wage bill.
An analyst said: "Most of the IT companies keep (a) variable component to engage employees. It forms an important component of their salaries. A part of this is usually fixed and a part dependent on the individual and company's performance.
The new Satyam board has appointed KPMG and Deloitte to restate the accounts after Satyam's founder and former Chairman B Ramalinga Raju admitted on January 7 to falsifying accounts.
Sources close to the development said the accounts are likely to be restated by March-end.
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