The ITC CMD’s overall remuneration jumped 47 per cent from the previous year to Rs 10.1 crore, one of the highest among key managerial personnel at the company. The chairman’s remuneration was at 222 times the median salary of an ITC employee against 168 times at the end of 2019-20, the company’s annual report for 2020-21 showed.
ITC said the computation of year-on-year change in remuneration included a recast of the year-ago figures to account for contribution to approved pension funds.
“The company adopts a comprehensive approach to remuneration in order to support superior quality of personal and work life, combining both cash and non-cash components in a manner which judiciously balances short term and long term priorities,” ITC said in its annual report.
The pay hike given to Puri was substantially higher than the median pay hike of 16 per cent given to employees of the company. However, Puri’s pay increase was lower than the average pay hike given to key managerial personnel (KMP). KMPs of the company saw an average hike of 51 per cent in the year “due to the impact of revision in remuneration during the year and increase in number of KMPs”.
The remuneration policy is market-led and takes into account the competitive circumstance of each business, so as to attract and retain quality talent and leverage performance significantly, ITC said in the annual report.
The financial year ended March 2021 was one of the toughest for ITC and the FMCG sector at large. The company’s consolidated revenue from operations grew merely 3.4 per cent to Rs 53,155 crore, while its consolidated net profit slumped 14 per cent to Rs 13,161.2 crore.
“Despite several operational challenges, the company’s resolve to adapt to the new normal and reimagine the next normal led to hardwiring of agility in every sphere of operation,” ITC said in its annual report.
Interestingly, ITC’s biggest rival
dished out a 21 per cent pay cut to its Chairman and Managing Director Sanjiv Mehta in the financial year ended March 2021. This was despite HUL’s consolidated total revenues rising 17.4 per cent and profit after tax surging 18.5 per cent in the pandemic year.
Muted earnings performance caused ITC’s stock underperform the Nifty FMCG index during 2020-21. ITC’s shares rose 27 per cent in the previous financial year but could not match the 32 per cent rise in the Nifty FMCG index and the 78 per cent jump in Nifty50 index.
To be sure, ITC remains one of the highest dividend paying companies in the market with a dividend payout ratio of more than 100 per cent in 2020-21 compared with 81 per cent in 2019-20.
