In addition, the directors’ emoluments rose 28.8% in the same period, when total work forces have been lowered to 39787 in FY20 compared with 44101 in the previous fiscal.
There are nine directors on the JLR management board and they include Felix Brautigam, Chief Commercial Officer, Ian Harnett, ED Global purchasing and Hanno Kirner, ED corporate and strategy.
After serving almost a decade as CEO, Speth is set to retire in September and take over as non-executive vice chairman. Tata Motors on Tuesday announced Thierry Bollore, former CEO of Groupe Renault as his replacement.
To be sure, Ralf Speth had taken a 20 % cut in his compensation in FY-19 and his previous compensation was 3.7 million pounds in the year FY2018.
In an official response to ET’s query, the Tata Motors spokesperson explained that in FY20, the increase in director’s emoluments is due to an increase in amounts accrued under the Long-term Incentive Plan. This has increased over the previous two years as the business starts delivering on its turnaround plans. These vests over a 3 year period and no cash settlement have happened during the year.
To be sure, the JLR Nomination and Remuneration Committee determines the overall remuneration policy and strategy with the Group’s short and long term strategic goals to ensure ‘transparency and alignment’, it claimed.
This rise in compensation is in accordance with Wates Corporate Governance Principles.
“The remuneration policy has quantified fixed and performance-related elements. The overall objective of the remuneration policy is to deliver a balanced executive pay with the majority linked to business performance and is in line with the market median range for target performance,” added the spokesperson.
However to the credit of Speth, Charge+, the next phase of transformation programme, is already ahead of schedule, having achieved a pro-forma £600 million of savings in Q4 Fiscal 2019/20 against a new target of over £2 billion of cost improvements by March 2021.
For the full fiscal year FY20, Tata Motors reported a consolidated loss of Rs 11,975 crore, compared with a loss of Rs 28,724 crore the previous year. Consolidated revenue for the year fell 14% to Rs 2.6 lakh crore.
Tata Motors has decided to cut costs, primarily capital expenditure, to improve cash flows. At JLR, it has increased the cost saving target to 5 billion pounds by the end of this fiscal year from 4 billion pounds, while cutting the planned capex by 500 million pounds to 2 billion pounds.
The pandemic hit JLR’s cash flow by 800 million pounds last financial year. It has reduced the planned capex to 2.5 billion pounds from 4.5 billion pounds for this fiscal year, while also increasing the cost-saving target under an ongoing two-year programme to 5 billion pounds from 4 billion pounds.
Download The Economic Times News App to get Daily Market Updates & Live Business News.