HUL chairman Sanjiv Mehta sees pay cheque shrink 21% in tough year

Sanjiv Mehta, chairman and managing director of Hindustan Unilever, the country's largest consumer goods company, saw his annual remuneration fall by 20.9 per cent to Rs 15.36 crore in the financial year ended March 31, 2021 (FY21).
 
Remuneration includes salary and allowances, bonus, perquisites, and contribution to provident fund and pension fund, according to the company's latest annual report. Details regarding stock option payouts to key executives were not given in the annual report.
 
Human resources experts said Covid-related challenges were among key reasons for the drop in Mehta's remuneration. In his statement to shareholders, Mehta said the pandemic had a significant impact on lives, livelihoods, and business.
 
"Operational challenges mounted due to restricted movement and disrupted supply lines during the first few months of the pandemic. As the second wave of the pandemic unfolds with predictions of a third wave, our focus continues to be on our people’s health and safety, ensuring uninterrupted supplies of Covid-relevant portfolio and meeting the demand arising out of evolving consumer needs," he said.
 
The impact of the pandemic could be seen on the total remuneration of key managerial personnel too.
 
The firm's top four executives, including Mehta, Chief Financial Officer Srinivas Phatak, Executive Director (legal and corporate affairs) Dev Bajpai, and Executive Director (supply chain) Wilhelmus Uijen, together took home a total remuneration of Rs 36.13 crore in FY21. This was down 3.63 per cent versus FY20, when the executives took home Rs 37.49 crore.

 
Yet, when compared to the median pay cheque of HUL employees in FY21, the payout to the firm's top executives is high.
 
Mehta's remuneration, for instance, was 122 times higher than the median salary of employees; Phatak's was nearly 57 times higher; Bajpai's was nearly 44 times, while Uijen’s was 65 times higher.
 
HUL reported a turnover of Rs 45,311 crore, a growth rate of 18.38 per cent over the previous year. Profit for the year also grew 18 per cent to Rs 7,954 crore versus the year-ago period.
 
The average increase in salaries of employees other than managerial personnel for FY21 was 3.4 per cent, HUL said. The firm had 8,525 permanent employees on its rolls in the year under review.
 
Given the disruption to business triggered by the pandemic, HUL gave a special cash award to its frontline sales force and factory-based employees in FY21 to recognise their discretionary effort.
 
"This has been a challenging year for all our employees, especially those in the frontline and factories, as they have strived hard to serve the nation by ensuring that our production and distribution of essential commodities runs smoothly," HUL said.
 
Mehta said significant changes were visible in buying behaviour of consumers, including growth of online shopping due to rising concerns about health, hygiene, sanitation, and nutrition.