Notice

2. INFORMATION ABOUT THE APPOINTEE(S):

1. Mr Guenter Butschek, Chief Executive Officer and Managing Director

1. Background details:

   Mr Butschek, aged 55, graduated in Business Administration and Economics with a diploma from the University of Cooperative Education Stuttgart, Germany.

   Mr Butschek's last position in the Airbus Group was of the Chief Operating Officer wherein he was also a Member of the Group Executive Committee. Mr Butschek joined Airbus on March 1, 2011, as Executive Vice President of Operations, Member of the Airbus Executive Committee and Chairman of the Board of Management of Airbus in Germany. He was responsible for its global operations leading a team of 42,000 employees spread across 20 locations (engineering centers, production plants) in 8 countries/geographies and a global supplier network. He reshaped the industrial strategy, empowered operational units, implemented a global operating system and enhanced the end-to-end supply chain performance in order to master the rate increases, launch of new aircraft types and to structurally improve productivity and flexibility.

   Prior to Airbus, Mr Butschek worked at Daimler AG, where he gained more than 25 years of experience in international automotive management, e.g. production, industrialization and procurement. Mr Butschek began his professional career in 1984 at Mercedes-Benz AG in Stuttgart, Germany, as Project Engineer Central Material Management. After several positions at the Mercedes-Benz Passenger Cars division, Mr Butschek became a Member of the Management Board of DaimlerChrysler South Africa (DCSA) with full operational responsibility in 2000. In 2002, Mr Butschek moved to the Netherlands as President and Chief Executive Officer of Netherlands Car B.V., a contract manufacturer within the global manufacturing network of DaimlerChrysler and Mitsubishi Motors Corporation. As part of a holistic transformation, he successfully managed the restructuring of processes and a turnaround program. The last role he held was President and Chief Executive Officer of Beijing Benz Automotive Co., Ltd, a joint venture between Daimler AG and Beijing Automotive Industrial Holding in Beijing, China. Leading the joint venture, he relocated the operations to an all new state-of-the-art facility and increased productivity and flexibility of the plant.

2. Job Profile and his suitability:

   The appointment of Mr Butschek is in the context of following: -

   • Over the last couple of years, the Company is going through a set of unprecedented circumstances i.e. sustained industry-wide lower demand, heightened competitive pressures from global OEM's, flux in regulatory environment, drop in profitability & productivity and a sudden demise of the Managing Director.
   • The Company is in the midst of a organizational transformational initiatives in response to the above. Given these challenges and strategic priorities, a search was undertaken on a global basis and multiple candidates were interviewed for the CEO & Managing Director’s role.
   • The Company was looking for an outstanding organizational level leader, who could provide strategic direction and create suitable execution framework to ensure the organization's success, both for short term and long term basis. Executives with large scale global automotive experience along with some exposure to complex restructuring/turnaround programs and cultural transformation initiatives were considered.

After interviewing by NRC members of multiple Executives with large scale global automotive experience alongwith some exposure to complex restructuring/turnaround programs and cultural transformation initiatives, Mr Butschek had been identified. It may be appreciated from the above that the NRC and Board have considered Mr Butschek appropriate for heading the Company.

Tata Motors Limited is India's largest automobile company, with consolidated revenues (net) of Rs. 2,75,561.11 crores (US$ 41.6 billion) in Fiscal 2016. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand, South Africa and Indonesia. Among them is Jaguar Land Rover, the business comprising the two iconic British brands. It also has an industrial joint venture with Fiat in India. With over 8 million Tata vehicles plying in India, Tata Motors is the country's market leader in commercial vehicles and among the top in passenger vehicles. Tata cars, buses and trucks are being marketed in several countries in Europe, Africa, the Middle East, South Asia, South East Asia, South America, Australia, CIS and Russia.

Mr Butschek leads all operations of Tata Motors in India which, inter-alia, include South Korea, Thailand, Indonesia and South Africa, but excluding Jaguar Land Rover which continues to be managed independently. The consolidated revenues from these operations is above Rs. 50,000 crores.

Mr Butschek provides Tata Motors with profound knowledge in complex restructuring/turnaround programs and cultural transformation initiatives by onboarding employees and creating ownership in the organization. His leadership creates international teams and fosters a culture of cross-functional teamwork, agility and accountability.

Taking into consideration the size of the Company, the complex nature of its operations, the strategic and operational restructuring and transformation required and Mr Butschek's broad functional and general management skills, his rich global experience of growing organizations and developing new markets, the Board appointed Mr Guenter Butschek. Also as a Director, he is nominated on the Board of certain subsidiary companies. It may be noted that the Company or its subsidiaries does not additionally compensate him in any manner for these additional activities.

3. Remuneration proposed:

   Details on remuneration have been stated in the Resolution No. 6 of the Notice. In monetary terms the remuneration for the 3 year period from the date of his appointment is given here under:

   

   Note: Remuneration of Rs 2724.98 lakhs from February 15, 2016 to February 15, 2017 in US$ equivalent is US$ 4,057,221 (1USD=R67.1687 as on May 30, 2016) The remuneration is denominated in € converted into R on the date of payment. Foreign Exchange Rate is assumed at a constant of 1€ = R75, except for FY2015-16 where it is paid on actual basis.

4. Comparative Remuneration profile with respect to the industry, size of the Company, profile of the position and person (in case of expatriates, the relevant details would be with respect to the country of its origin):

   Remuneration of Mr Butschek is commensurate with the remuneration of expatriates appointed at CEO/MD levels of similar sized multinationals taking into consideration the responsibilities shouldered by him. Mr Butschek's remuneration is commensurate with his past remuneration and has been subjected to peer level benchmarks for global automotive OEMs as per survey conducted by Aon Hewitt, an independent consultant. The table below illustrates the requisite comparative data of the CEO remuneration in the global industry at the time of his appointment:

   

   (Data Source: Aon Hewitt Compensation Study, Positions of Business Heads who are Direct reports to the CEO for global automotive OEM's.)

   Note: It may be observed that the remuneration decided for Mr Butschek is comparable with global auto OEM’s and be commensurate with the set benchmarks taking into consideration the responsibilities being shouldered by him.

5. Pecuniary relationship directly or indirectly with the company, or relationship with the managerial personnel, if any:

   Mr Butscheck has joined the Company in a professional capacity and meets the criteria of a professional director with appropriate qualifications, does not hold any securities of the Company and is not related to the promotors or any director of the Company. Besides the remuneration paid/payable to Mr Butschek, there is no other pecuniary relationship with the Company or with the managerial personnel of the Company.

2. Mr Ravindra Pisharody, Executive Director (Commercial Vehicles)

1. Background details:

   Mr. Pisharody aged 61, is a B. Tech (Elec.), PG Diploma in Management (Marketing), with wide and varied experience in business and the automobile industry.

2. Past Remuneration:
   
   

   It may be noted that in view of the financial performance of the Company on a standalone basis for the past few years, the Company had significantly reduced the variable portion of the remuneration, viz. incentive remuneration. The salary increments were decided based on industry benchmarks, the Company's growth plans and with a view to retain talent. For further information, please refer to point no. 5 pertaining to 'Comparative Remuneration Profile'.

   The Company does not have an Employee Stock Option Scheme for any of its employees or directors.

3. Job profile and his suitability:

   Mr Pisharody is the Executive Director (Commercial Vehicles) since June 21, 2012. He joined the Company in 2007 as Vice President, Sales and Marketing. He is responsible for the Commercial Vehicle Business Unit of the Company involving product design and development, manufacturing, sales and marketing functions. Since the time he took over as the Head of Commercial Vehicles, he has held the business strong in the midst of intensifying competition in every product segment. Before joining the Company, he worked with Castrol Ltd., a subsidiary of British Petroleum and with Philips India, a subsidiary of the Dutch company in various roles. Mr Pisharody is an alumnus of IIT, Kharagpur and IIM, Kolkata. He actively participates as a Member of National Council of the Confederation of Indian Industry and is currently the Vice President of Society of Indian Automobile Manufacturers (SIAM). Under his able leadership the Company has maintained a strong and innovative product pipeline, pioneered novel customer service initiatives and restructured network management bringing end-to-end accountability. Mr Pisharody has charted out the Company's long-term strategy for preserving the Company's lead position in the commercial vehicle segment in the Indian automobile market and concurrently increasing market penetration in international markets. His effective leadership coupled with his multi-industry experience and stellar academic record makes him a valuable resource for the Company and would be best suited for delivering the vision of the Company.

   In addition to the above, he also Chairs the Corporate Social Responsibility (CSR) Steering Committee of the Company and participates in the CSR Committee of the Board. Spearheads and mentors the Critical Success Factor (CSF) initiatives of CVBU focusing on improving internal efficiencies, adopting globally benchmarked best practices and increasing the profitability of the organization. Reviews and oversees implementation of Safety, Health and Environment related practices of the Company and the Tata Business Excellence Model (TBEM) guidelines. He has also been mentoring the TBEM external assessment team of other Tata companies over the years. He is part of the Company's Diversity Council, apex body that guides and reviews efforts to have a diversified workforce. As a Director nominated on the Board of 10 subsidiary companies, which includes the international subsidiaries in Thailand, South Korea and Indonesia, he provides valued direction and business acumen. During the Fiscal 2016, he was the Chairman of the Board of Tata Cummins Pvt. Ltd., Tata Daewoo Commercial Vehicles Co. Ltd., Tata Marcopolo Motors Ltd. and Tata Motors SA (Pty) Ltd. It is worthy to note that the Company or these subsidiaries (except Tata Daewoo Commercial Vehicles Ltd. in view of his significant contributions as a Board Member, to its improved performance) do not additionally compensate him, in any manner, for these additional activities.

Achievements and Performance Highlights during FY 2015-16:

• A robust leadership ensured that the Company maintained industry leadership in the most challenging environment with increased competition, as more and more global players infiltrated the industry. The Company has been able to maintain strong market share of 56% in the critical M&HCV truck segment.
• Oversaw 327 vehicle launches during the year in domestic as well as international business, comprising of new generation vehicles as well as derivatives and enhancements of existing product line, covering various segments. Prominent amongst these were the SIGNA range of M&HCVs and ACE Mega, the all-new Smart and Small Pick-up Truck. Our products won 3 prestigious awards at the Apollo CV Awards:
  • Cargo carrier of the year - Tata LPS 4923
  • School Bus of the year - Tata Cityride Skool Bus
  • Special Application CV of the year - Tata MHC 2038
• Development and implementation of the Commercial Vehicle Business Unit (CVBU) Strategy, which included brand building, focusing on organizational and leadership development to build a cohesive CVBU team with aligned views, achieving enhanced customer satisfaction and loyalty.
• Was instrumental in the expansion of global footprint through the launch of Tata Prima in Kenya, Uganda and Bangladesh; Ultra Bus in Sri Lanka; Ultra trucks in Bangladesh; Elanza bus in UAE and Ace Express, Ace Mega in Sri Lanka and Nepal. Continuing the journey to be a true global player, the company also opened Assembly units with third party vendors in Tunisia and Vietnam. The Company participated in key motor shows and conclaves around the world such as the Colombo Motor Show, Nepal Automobile Dealers' Association (NADA) Auto Show, Thailand Motor Expo, Thailand Defense Expo and Malaysia Truck and Bus Components Expo.
• Continued the success of Prima Truck Racing Championship with its Season 3 which attracted over 50,000 spectators. The highlight this year was the first ever race of Indian truck racing talent, trained and nurtured in India. Tata Motors has conceptualized and introduced an Indian Driver Training and Selection program - "T1 Racer Program" to induct and mould Indian truck drivers as 'racers'.
• Participated in SIAM Auto Expo 2016 and showcased future technology solutions including Magic Iris Ziva, Starbus Hybrid and Ultra Electric along with the SIGNA M&HCV range, ULTRA 1518 Sleeper, ACE MEGA XL and ULTRA 1415 4X4.
• Signed a contract to supply 25 Tata Starbus Diesel Series Hybrid Electric Buses with Full Low floor configuration, with the Mumbai Metropolitan Region Development Authority (MMRDA) – the single largest order awarded for Hybrid Electric vehicle technology.
• The business was honored with the 'Best Telematics Product or Launch in the Emerging market' award for its Telematics solution, ased on the popular Android platform developed for the Tata Magic Iris Electric.
• Pioneered industry first Marketing Service Initiatives such as Tata Kavach, Tata Zippy, Truck World Advanced Trucking Expo and driver engagement initiative 'Ek Shaam Saarthi Ke Naam'. Tata Motors Loyalty Program (Tata Delight and Tata Emperor) was recognized by DMA Asia ECHO™ Awards and PMAA Dragons of Asia.
• Leading growth of the critical Defense business with over Rs. 1,000 crores in revenue and over Rs. 1400 crores in order books. The business bagged an order to supply 1,239 units of high-mobility 6X6 multi-axle trucks, from the Indian Army – the single largest order awarded to an Indian private OEM in land systems under the DPP by the Indian Army, followed up with an additional order for 619 units. Submitted the EOI for the USD 12 billion Future Infantry Combat Vehicle (FICV) with Bharat Forge as the Consortium Partner & General Dynamics as the Platform Integration Partner.
• Improved safety of working conditions across the CVBU and reduced the frequency of accidents by 20% surpassing targets.
• Promoting energy efficient manufacturing practices with our plants winning several accolades - Golden Peacock Environment Management award for Pantnagar plant, Lucknow plant won the Bureau Energy Efficiency National Energy Conservation Award fourth time this year, Pune plant received CII-GBC Green Co Best Practices Award-2015, First Prize titled 'Excellence in Energy Efficient Unit-2015' Award' by CII for Dharwad plant and Jamshedpur Plant has been rated 'Green Co Gold' by CII-Godrej GBC Jamshedpur Plant became the 'First Company in Eastern India' to achieve this prestigious rating.

  Taking into consideration the qualifications, achievements and varied experience, the Board continues to bestow upon Mr Pisharody the responsibilities of Executive Director (Commercial Vehicles).

4. Remuneration proposed:

   Details on remuneration have been stated in the Resolution at Item No. 7 of the Notice.

5. Comparative remuneration profile with respect to industry, size of the company, profile of the position and person (in case of expatriates the relevant details would be with respect to the country of his origin):

   In view of the financial performance of the Company on a standalone basis for the past few years, the Company had significantly reduced the variable portion of the remuneration, viz. incentive remuneration. The salary increments to the Executive Director for FY 2015-16 of 7% was decided based on industry benchmarks, the Company's performance and growth plans and with a view to retain talent. The metrics used by the Nomination and Remuneration Committee while deciding the salary increase of 8% for FY 2016-17 were inter alia based on a survey conducted by Aon Hewitt, an independent consultant, depicting an average salary increase in India averaging around 10.6% and the Indian automotive manufacturing industry the salary increment was around 10%.

   Remuneration paid/payable to Mr Pisharody, is commensurate with industry standards and Board level positions held in similar sized domestic companies, taking into consideration the responsibilities shouldered by him. The table below illustrates the requisite comparative data:

   
6. Pecuniary relationship directly or indirectly with the company, or relationship with the managerial personnel, if any:

   Besides the remuneration paid/payable to Mr Pisharody, there is no other pecuniary relationship with the Company or with the managerial personnel of the Company.