HUL CMD Sanjiv Mehta took home less salary even as profit grew

Sanjiv Mehta's total remuneration was Rs 18.88 crore in FY19, down 2.52 per cent from a year earlier

Hindustan Unilever’s (HUL’s) Chairman and Managing Director Sanjiv Mehta took home a smaller pay cheque for 2018-19 financial year (FY19) even as the company’s sales and profit grew during the period. 

HUL’s FY19 annual report, released on Monday, shows that Mehta’s gross salary or total remuneration was 18.88 crore, down 2.52 per cent from a year earlier. In FY18, Mehta had taken home a remuneration of Rs 19.37 crore, which was a 36.4 per cent increase over the previous period. 

While Mehta’s FY19 salary and allowances, perquisites and provident fund contribution have grown by 26.43 per cent, 7.28 per cent and 13.15 per cent each from a year ago, bonus has halved to Rs 2.73 crore from Rs 5.58 crore in FY18. HUL did not specify the reasons for this. 

But human resource experts say performance-linked bonus for a company’s top executives is decided by its board of directors and is based on achievement of certain performance parameters. HUL incidentally closed FY19 with sales of Rs 37,660 crore and a profit of Rs 6,036 crore, a growth of nearly 9 per cent and 15.25 per cent respectively. The company hiked the salary of its managerial staff by 6 per cent for the year and Mehta’s pay cheque despite the drop was 194 times the median remuneration of  employees for FY19.

Mehta said, in his address to shareholders in the annual report, the company had achieved significant milestones, including delivering earnings before interest tax depreciation and amortisation (Ebitda) of Rs 8,500 crore in FY19. 

“Our Ebitda margins are at its highest ever of 22.9 per cent and profit crossed the Rs 6,000-crore mark for the first time,” he said.

HUL has five brands with top line in excess of Rs 2,000 crore and seven brands with sales above Rs 1,000 crore, its latest annual report shows. Brands with sales of over Rs 500 crore are eight, with the company continuing to invest behind these as well as new innovations, it said.

HUL has brought down its permanent employee count marginally to 5,645 people from 5,725 a year ago, and has reduced its average salary increase for non-managerial staff by 240 basis points to 7 per cent for the period under review. In FY18, the average increase in the salaries of non-managerial staff stood at 9.4 per cent, higher than the 5.6 per cent increase given the year before.