L&T CFO, CEO took double-digit remuneration cuts in FY23: Annual report

In comparison, the median remuneration for all employees rose by 3.06%; average increase in pay for non-managerial employees was 7.72%

Two top executives at Larsen & Toubro (L&T)--the chief financial officer and the managing director--took double-digit cuts in remuneration in FY23, according to data disclosed in the company’s latest annual report.

According to L&T’s FY23 annual report, S N Subrahmanyan, chief executive officer and managing director of the company took home a total remuneration of Rs 35.67 crore in FY23. This was 41 per cent lower than the previous year, the annual report noted. The remuneration for R Shankar Raman, the firm's chief financial officer and whole-time director was down 22.56 per cent, at Rs 22.17 crore in FY23.

In comparison, the median remuneration for all employees rose 3.06 per cent in FY23, according to the annual report. The average increase in pay for non-managerial employees was 7.72 percent.

The company did not share the reason for the decrease in the remuneration of the two top executives. An email query sent to L&T on Tuesday remained unanswered. In FY22, remuneration for both the top executives saw a more than 100 per cent rise. L&T, in its FY22 annual report, attributed increase in managerial remuneration to factors such as higher eligible profits and base adjustment, amongst others.

Capex recovery

In the Chairman statement, AM Naik noted there has been rare, synchronous recovery in capital expenditure. “These are rare occasions in the country’s history where we are seeing a synchronous capex recovery in India and the GCC,” he said, adding, “…the Middle East region is the primary overseas market. It is expected to have higher investment outlays, and appears to be shifting focus from oil to clean energy and other industrialisation initiatives. Over time, the pick-up in Africa and South East Asia will reduce concentration risk in our international project businesses.”

The upcoming annual general meeting (AGM) on August 9, would be Naik’s last as the company chairman. “This is succession planning in the full sense of the term, and the change of guard at L&T could well rank among the smoothest in Indian industry,” he said in the annual report. Naik would be stepping down as Non-Executive Chairman of L&T, effective September 30 and Subrahmanyan will take over as the chairman and managing director. Naik will continue as Chairman Emeritus.

Debt-based funding

L&T, in its annual report said, it proposes to raise long-term debt in the current financial year, to refinance almost Rs 4,500 crore of maturing debt and to fund its proposed capital expenditure. Further, L&T said, it is seeing a significant volume of large-value contracts in the Middle East, especially from Saudi Arabia, which will require large banking facility tie-ups locally.