As Covid-19 crisis moderated growth numbers of Tata Consultancy Services in the last financial year, top management of the firm took home lesser pay to conserve cash.
Chief Executive Officer Rajesh Gopinathan’s compensation fell around 16 per cent to Rs 13.3 crore and included Rs 1.35 crore in salary, Rs 1.29 crore in perquisites, Rs 10 crore in commission (at 0.02 per cent of profit) and over Rs 72.82 lakh in other allowances. In 2018-19, his compensation was Rs 16.02 crore.
TCS Chief Operating Officer N Ganapathy Subramaniam earned over Rs 10.11 crore in FY20 as compared to Rs 11.61 crore in FY19—a 12.9 per cent decline. Chief Financial Officer Ramakrishnan V took home Rs 3.98 crore in FY20 compared to Rs 4.13 crore last year.
"The managerial remuneration for the year decreased by 15 per cent. The executive remuneration for FY20 is lower than FY19 in view of the economic conditions. The directors decided to moderate the executive remuneration for this year to express solidarity and conserve resources," according to the IT giant's annual report.
The firm said the average annual increase during FY20 was 6 per cent in India. The total increase was approximately 7.7 per cent, after accounting for promotions and other event-based compensation revisions.
Though the pandemic poses near-term challenges to company's growth prospects, it expects to weather the storm on the back of its strong business model. “The next few months will be difficult, but your company is strong. It is well positioned to weather the storms ahead and take advantage of opportunities that come up during the downturn to acquire new capabilities and gain market share ,” the Chairman of TCS as well as Tata Sons, N Chandrasekaran, said.
Gopinathan wrote to shareholders that whenever the externality is removed, an equally quick recovery should follow.
Flagging concerns owing to Covid-19 pandemic, the Tata Group company said client defaults may rise due to disruption in operations. The IT firm has specifically evaluated the impact in retail, travel, transportation and hospitality, manufacturing and energy verticals, which could be immediately hit due to the pandemic.
It said assessment was done with respect of unbilled receivables and contract assets of Rs 10,545 crore as of March 31, while arriving at the level of provision that is required. "Basis this assessment, the allowance for doubtful trade receivables of Rs 1,137 crore as of March is considered adequate," the company said.