Bharti Airtel has proposed a higher annual pay of at least Rs 30 crore, excluding perquisites, for its Chairman Sunil Bharti Mittal.
The telecom major will seek shareholders' approval for the proposed hike in pay package for Mittal as well as for its Managing Director for India Gopal Vittal at the Annual General Meeting scheduled on August 19.
It is proposed to re-appoint Mittal for a period of five years starting October 1, 2016 at fix pay of "Rs 210 million per annum or such other amount as may be determined by the Board of Directors of the Company, provided that increment if any during the subsequent years, shall not exceed 10 per cent per annum of the fixed pay of preceding financial year," the company informed its shareholders.
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Besides this, there will be a variable pay to the tune of Rs 9 crore linked to performance and will be paid annually.
This calculation excludes perquisites which shall not exceed 50 per cent of the fixed pay in any financial year.
Mittal shall also be entitled to reimbursement of all legitimate expenses incurred by him in performance of his duties and such reimbursement will not form part of his remuneration, the proposal said.
In 2015-16, Mittal was paid salary and allowance of Rs 19.17 crore, variable pay of Rs 7.5 crore and perquisites amounting to Rs 11.78 crore.
Remuneration of Vittal is also proposed to be revised with effect from June 1, 2016, for the remaining period of his tenure which is up to January 31, 2018.
He is proposed to be given fix salary of "Rs 70 million per annum or such other amount as may be determined by the Board of Directors" and variable pay of up to Rs 3 crore.
In 2015-16, Vittal was paid a salary of Rs 4.2 crore, variable pay of Rs 1.95 crore and perquisites of Rs 46,323.
Mittal also made a reference to the high tax rates for the
telecom industry.
"...Spectrum is still very expensive, the taxes, duties... all these issues put together load our industry 30-45 per cent taxes depending on which part of the world you are in," he said.
Mittal, who is also the GSMA Chairman, said the operators need to come together to build common infrastructure.
"The return on capital deployed is fast coming down," he said. "In countries like India, you are looking at low single digit return on capital employed. You might as well put the money in the bank and get a decent return and go out and play golf rather than spend this 400 billion a year on hard capital expenditure that you do."
He regretted that the only time people or customers remember operators is when there is call drop or speed of data session.
"Our industry is building too many different highways. Every operator wants to build his own network. I think it's time for us to start looking at how to create the next course. Every car manufacturer does not build his own roads, you need to have common infrastructure," he said.
He added that GSMA, which represents telecom players and operators globally, has a group together to see cost of networks can be reduced dramatically to provide more value to customers.
