Tata Sons appoints international HR firm on Chandrasekaran's salary hike

Tata Sons, the holding company of the Tata Group, has appointed an international executive search firm to give an independent opinion on the salary hike of its chairman, N Chandrasekaran, who will complete his first year in office next month. The firm’s opinion will be taken into consideration by the nomination and remuneration committee (NRC) of the Tata Sons board, which will then recommend a hike for Chandrasekaran.

According to Tata Sons’ annual report for the year ended March 2017, an annual increment will be effective from April 1 every year, and it will be decided by the board based on the recommendations of the NRC. The salary hike will take into account both the chairman’s and Tata Sons’ performance during the past financial year.

As of now, Chandrasekaran’s annual salary is Rs 24 million, which can go up to Rs 48 million. Besides, he is also entitled to up to 200 per cent of basic salary as performance-linked remuneration.

An e-mail sent to Tata Sons seeking comment did not elicit any response.

Chandrasekaran took over as chairman of Tata Sons on February 21 last year, at a lower salary than what he was earning at India’s largest software exporter, TCS, as its CEO and MD. In the financial year 2016-17, Chandra earned Rs 300 million from TCS, which consisted mainly of commission on profits, while his basic salary was Rs 24 million.

Tata insiders said the NRC would take into account how Chandra had tried to bring the Tata Group back on the track after a bitter fight between its patriarch Ratan Tata and his protégé-turned-foe Cyrus Mistry. Tata Sons and the Mistry family are fighting a legal battle in the National Company Law Tribunal (NCLT), Mumbai bench.

Interestingly, the NRC had recommended a salary hike for former chairman Cyrus Mistry in 2016, but within a few months he was ousted.

In the past one year, Chandra has exited from loss-making telecom business, and has evinced interest to take over Air India and stressed steel assets on sale by Indian lenders. Tata Steel has also decided to merge its loss-making steel business in Europe with ThyssenKrupp of Germany. The passenger car business of Tata Motors is set to launch a series of models to garner market share. He has almost shut down its small car Nano, which has been incurring losses since launch.

Tata Sons is also on its way to raise Rs 50 billion from domestic markets, and another $1.5 billion as foreign loan.