Performance bonus of top-level management of big corporate houses will take a hit this year as the financial turmoil takes a toll on companies? performance in the current fiscal. Top management of big corporate houses whose performance bonus runs into crores like those of the Aditya Birla Group, M&M, HUL, the Hinduja Group and the RPG Group are likely to see less or no performance incentives this fiscal.
Rajeev Dubey, president – HR, after-market and corporate services, and member of the Group management board at M&M Ltd told FE, ?If businesses overall do not do well, which is true for some organisations, then their employees will not get as much incentives as they got last year, and this applies to the top management as well.?
Debu Bhattacharya, MD of Hindalco, was paid a hefty Rs 2.57 crore towards performance bonus linked to achievement of target in FY07. Similarly, Sumit Banerjee, CEO of ACC Ltd, is also entitled to a performance incentive upto a maximum of 30% of his gross annual salary.
S Misra, MD of UltraTech, received Rs 88 lakh towards performance incentives for achieving targets in FY07, and Shailendra Jain, whole time director and DD Rathi, whole time director and CFO of Grasim Industries, received Rs 1.34 crore and Rs 55 lakh respectively as performance linked variable pay on achieving targets.
The Hinduja Group has the performance based variable component of most of its group companies? CEOs? linked to the CTC (cost to the company) concept, which ranges anywhere between 25 to 40%.
?Those performance incentives linked purely to profit sharing will see a big hit, but most of our group companies? performance incentives are linked to the CTC concept. This year, businesses will not be as robust as last year and in many cases, targets are getting revised. However, a decent amount of bonus will be paid on achieving targets,? said Sudhanshu Tripathi, group president – HR, Hinduja Group.
Anirudh Singh, senior VP – corporate HR of JSW Steel declined to comment on this. Meanwhile, Arvind Agrawal, president and chief executive, corporate development and HR, RPG Group said, ?Performance bonus will be lower if the business does not perform well, despite a good individual performance. But it?s too premature to say this now.? The performance incentive of RPG Group?s top-level management ranges between 15 to 20% of the CTC.
