Covid-19 crisis: Hindustan Unilever's crorepati club shrinks by 10% in FY20

As many as 129 employees took home a remuneration of Rs 1 crore and above at Hindustan Unilever (HUL) in financial year 2019-20 (FY20), which is nearly 10 per cent lower than the number last year, data from the company’s latest annual report shows.

The shrinkage in the crorepati club comes as the company fights the Covid-19 crisis. The company has seen its top line and bottom line grow 1.62 per cent and 11.63 per cent, respectively, in FY20 versus a year ago.

HUL employees, said HR experts, have the option to defer a part of their bonus and receive a larger amount, based on the company's performance in the following three years. This, says Ajay Shah, head, recruitment services, TeamLease, could be one reason for the size of the club coming down in FY20. HUL said in its latest annual report that the average increase in remuneration was an outcome of the company's market competitiveness, reflecting industry practices and benchmarking standards.

The percentage increase in the median remuneration of HUL employees (as a whole) was 4.26 per cent only, and employees other than managerial personnel saw an average increase of 5.04 per cent in their salaries during the year.

HUL's permanent employee base in FY20, for the record, stood at 7,082, an increase of 25 per cent over the previous year.

In FY19, the crorepati club at HUL had expanded by nearly 27 per cent because executives in the Rs 90-95-lakh-bracket had received bonus and increments, helping them cross the Rs 1-crore-mark, HR experts said.

Also, 43 per cent of HUL's crorepati club in FY20 is made up of those who are 40 years and below, pointing to the larger trend of placing greater emphasis on younger people, said experts. 

The company had earlier said that Chairman and Managing Director Sanjiv Mehta took home a gross salary of Rs 19.42 crore, a 2.86 per cent increase over the previous year. The company’s key managerial personnel including Mehta, chief financial officer Srinivas Phatak and executive director, legal and corporate affairs, Dev Bajpai, took a total remuneration of Rs 37.49 crore, an increase of nearly 3 per cent versus last year.

“In the past few years, the trend of giving more role and responsibility to younger people has grown,” says Charu Sabnavis, an independent HR expert and founder-director of Mumbai-based firm Delta Learning. “Compensation packages to younger executives have grown as a result, visible across sectors,” she says. 

Some experts, however, warn that FY21 will see pay packages of managerial personnel being trimmed as companies realign their priorities post Covid. Already, many firms across India Inc have seen their managements take a pay cut as they adjust to market realities. A recent survey by Nielsen said companies across sectors were cutting back on non-essential expenditure in a bid to manage costs better.