ITC to hike chairman and managing director Sanjiv Puri's salary by 45%
Incidentally, Sanjiv Puri’s total compensation also includes performance bonus which will not exceed 300% of basic salary as determined by the board and will be paid annually.
Last October, ITC had sought shareholder approval to offer stock options to employees which was turned down by its largest shareholder UK-based British American Tobacco plc, which owns 29.58% in the conglomerate, thereby defeating the proposal.
The country’s largest cigarette maker has proposed to increase the consolidated salary per month of Puri from Rs 15 lakh to Rs 22 lakh. While the basic salary of the three directors – Nakul Anand, B Sumant and Rajiv Tandon – is proposed to be hiked from Rs 10 lakh per month to Rs 13 lakh per month.
ITC said the changes in compensation of these four top management executives will be with effect from October till the respective date of their current term of appointment, after it receives shareholders nod.
“The proposed variation (change in remuneration) is necessitated, inter alia, in the context that the number of stock options remaining under the company's employee stock option schemes is limited and the option for introducing another equity based long term incentive scheme is currently not available with the company, thereby requiring restructuring of executive compensation,” ITC said in the notification.
ITC said while revising the compensation it had also taken into account the enlarged role of Puri as the chairman of the company from May following the demise of non-executive chairman YC Deveshwar.
An industry executive said the company had already undertaken a salary revision for other employees who are eligible for stock option.
Incidentally, Puri’s total compensation also includes performance bonus which will not exceed 300% of basic salary as determined by the board and will be paid annually. For the executive directors, the performance bonus component will not exceed 200% of the basic salary. This apart, Puri’s perquisites per annum is limited to Rs 15 lakh and that of the executive directors to Rs 10 lakh and host of other benefits.
Puri’s total remuneration in 2018-19 had gone up by more than 50% to Rs 6.16 crore. In FY18, it had gone up by 140% to Rs 4.06 crore from Rs 1.69 crore. Puri was appointed to ITC’s board in 2015 and became the CEO of the company in 2017 as part of the succession planning for the chairman’s post.