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The remuneration by way of commission to the Non-Executive
Directors is decided by the Board of Directors and distributed
to them based on their participation and contribution at the
Board and certain Committee meetings as well as time spent
on matters other than at meetings. The Members had, at the
Annual General Meeting held on August 21, 2013, approved
the payment of remuneration by way of commission to the Non
Whole-time Directors of the Company, of a sum not exceeding
1% per annum of the net profits of the Company, calculated in
accordance with the provisions of the Act for a period of 5 years
commencing April 1, 2013, respectively.
No Commission was paid to any Non-Executive Director for FY
2016-17 in view of inadequacy of profits.
The performance evaluation criteria for Non-Executive
Directors, including Independent Directors, is determined by
the NRC. An indicative list of factors that were evaluated include
participation and contribution by a director, commitment,
effective deployment of knowledge and expertise, effective
management of relationship with stakeholders, integrity and
maintenance of confidentiality and independence of behaviour
and judgement.
Given below are the Sitting Fees paid/ payable by the Company
to Non-Executive Directors during FY 2016-17:
`
in lakhs
Name
Sitting Fees
Mr Cyrus Mistry
(1)
6.60
Mr N Chandrasekaran
(2)
2.40
Mr N N Wadia
(3
)
6.60
Dr R A Mashelkar
15.60
Mr N Munjee
14.40
Mr S Bhargava
(4)
9.00
Mr V K Jairath
15.80
Ms Falguni Nayar
14.40
Dr Ralf Speth
(5)
-
Total
84.80
(1) Resigned as the Non-Executive Chairman and Director of the Company
with effect from December 19, 2016.
(2) Appointed as an Additional Director and Non-Executive Chairman of
the Company with effect from January 17, 2017.
(3) Removed as an Independent Director by the Shareholders at the
Extraordinary General Meeting of the Company on December 22, 2016
(4) Retired in accordance with the Company’s Governance Guidelines on
Board Effectiveness upon attaining 75 years of age on March 29, 2017.
(5) DrRalfSpeth isaNon-ExecutiveDirectorand isnotpaidanycommission
or sitting fees for attending Board meetings of the Company in view of
his appointment as Chief Executive Officer and Director of Jaguar Land
Rover Automotive PLC.
Some of the aforementioned Directors are also on the Board
of the Company’s subsidiaries and associates, in a non-
executive capacity and are paid remuneration and sitting fees
for participating in their meetings. Other than the above, the
Non-Executive Directors have no pecuniary relationship or
transactions with the Company, its subsidiaries and associates.
Managing and Executive Directors
The remuneration paid to the CEO & Managing Director and the
Executive Directors commensurates with industry standards and
Board level positions held in similar sized companies, taking into
consideration the individual responsibilities shouldered by them and
is in consonance with the terms of appointment approved by the
Members, at the time of their appointment.
The NRC, reviews and recommends to the Board the changes in
the managerial remuneration, generally being increment in basic
salary and commission/incentive remuneration of the Managing
and Executive Directors on a yearly basis. This review is based on the
Balance Score Card that includes the performance of the Company and
the individual director on certain defined qualitative and quantitative
parameters such as volumes, EBITDA, cashflows, cost reduction
initiatives, safety, strategic initiatives and special projects as decided by
the Board vis-a-vis targets set in the beginning of the year. This review
also takes into consideration the benchmark study undertaken by
reputed independent agencies on comparative industry remuneration
and practices.
The variable portion of the CEO & Managing Directors remuneration
comprises of incentive remuneration in the form of performance
linked bonus and long-term incentive. The target performance linked
bonus would be €550,000 per annum upto a maximum of €825,000
per annum. With the objective of achieving long-term value creation,
through retention and continuity in leadership, a long term incentive
plan is provided, with a value intended target of €550,000 per annum
upto a maximum of €825,000 per annum. For the period from the date
of joining upto March 31, 2017, the amount for the performance linked
bonus and long-term incentive will be the target annual performance
amount of €550,000 for each of the aforesaid 2 components, prorated
for the actual period worked.
The variableportionof the ExecutiveDirectors remuneration comprises
a profit-linked commission and/ormerit based incentive remuneration.
The profit-linked commission is awarded at the discretion of the NRC
and the Board of Directors, based on the net profits of the Company
for that financial year, subject to the overall ceiling limits stipulated
in Section 197 of the Act, but in any case not exceeding 400% of the
basic salary. In case the Net Profits of the Company are inadequate for
payment of profit-linked commission in any financial year, an incentive
remuneration, not exceeding 200% of the basic salary, may be paid at
the discretion of the Board.
Given below are details pertaining to certain terms of appointment
and payment of Managerial Remuneration to the CEO & Managing
Director and Executive Directors for FY 2016-17:
Corporate Overview
Financial Statements
Statutory Reports
176
72nd Annual Report 2016-17