The IL&FS management handed themselves a pay hike in FY18 even as the company seemed unlikely to meet its repayment schedule on various borrowing programmes.
The IL&FS management handed themselves a pay hike in FY18 even as the company seemed unlikely to meet its repayment schedule on various borrowing programmes, leading to a spate of ratings downgrades that began late May this year.
While the increase in their fixed salaries for FY18 varied between half a percent to as much as 75%, the increase, including performance-related pay, was as much as 144% given to former chairman Ravi Parthasarathy.
However, a large part of this would be benefits due to him on retiring, having been with the company for 29 years, which he quit in July this year on health grounds. Hari Sankaran, VC & MD, received a 3.9% increase, including performance pay, leave encashment, leave travel and other reimbursements, while Arun K Saha, joint MD & CEO, received a 10.42% increase. Maharudra Wagle, group CFO, received a 37.29% increase.
According to information in the company’s annual report, the percentage increase in the median remuneration of its employees in FY18, other than managerial personnel, was 4.44%. In contrast, for managerial personnel, the average percentage increase was 66%. As of March 31, 2018, IL&FS had 131 permanent employees on its rolls other than three whole-time directors.
Moreover, the company’s nomination and remuneration committee (NRC), headed by SB Mathur (who is now set to take over as IL&FS’ non-executive chairman), met six times between April 2017 and March 2018. Mathur has been on the IL&FS board since January 2005. In contrast, IL&FS’ risk management committee (RMC), comprising RC Bhargava, chairman of Maruti Suzuki, and Arun Saha, joint MD and CEO, IL&FS, among others, did not hold a single meeting during the year. This is despite the fact the company knew it would be unable to meet its repayment schedule on various borrowing programmes, given the liquidity crunch.
According to information available in the company’s annual report, the NRC had six meetings held on April 26, 2017, May 29, 2017, November 09, 2017, January 31, 2018, February 21, 2018 and March 26, 2018. Mathur attended all six meetings while former shipping secretary Michael Pinto, also an independent director, attended five. For FY18, IL&FS swung to a loss of Rs 1,886.85 crore from a profit of Rs 141 crore a year ago.