Piramal to pay up to 6 month's salary as bonus to employees

Piramal Healthcare, which recently sold its domestic formulations business to Abbott Labs for about Rs 18,000 crore, has announced a bonus payment of up to six months' salary to its employees.

"Our workers helped us in creating value for our company and to give them a recognition for their contribution, we have decided to make one-time payment to all our employees," Piramal Healthcare Executive Director Swati Piramal said.

She said the company will make the payment to all workers, including the 5,000 who will move to Abbott as part of the $3.7 billion (Rs 18,000 crore) deal signed last month.

In an e-mail sent out by company Chairman Ajay Piramal, Piramal Healthcare assured that all employees will get the one-time bonus, which will vary from one to six months' salary, depending on their tenure of service at the company.

"As a token of our appreciation, we have decided to give an ex-gratia payment to all management staff who are on the rolls of the company on the date of completion of the transaction, whether they are moving to Abbott or continue to remain with us...," the mail said.

Piramal said employees who have completed between one and three years of services will get a bonus of one month's fixed salary. Those who have completed three to five years will get two months' salary and those that have completed five to 10 years will get four months' salary.

Employees with more than 10 years of service at the company will get six months' of their fixed salary as a bonus.

However, it could not be ascertained how much the bonus payments will cost the company. As per the information available, the total employee cost to the company in the fourth quarter ended March 31, 2010, stood at Rs 135 crore.

In his e-mail, Piramal, however, said the bonus payment will materialise only after the successful closing of the transaction with Abbott.

Last month, US-based drug maker Abbott had signed an agreement with Piramal Healthcare for acquiring the latter's domestic formulations business for $3.72 billion (about Rs 17,484 crore).