Constrained by the Companies Act, India’s greatest automaker, Tata Motors, is looking for approval from the central government for the salary plan finalized for its recently selected managing director Guenter Butschek.
The Tata Motors management authorized an annual 2016-17 pay of Rs 27.24 crore ($4,075,256) to the previous Airbus executive who joined the Mumbai-based automaker in mid-February 2016.
This makes Butschek the automaker’s highest-paid executive, as his compensation plan stands at more than two times the size of his predecessor Karl Slym which was Rs 12.84 crore ($1,909,718) and over 4 times that of the chief monetary officer, C Ramakrishnan which was at Rs 5.86 crore ($871,569) for 2015-16.
Butschek planned pay is greater than the recommended limitations as specified under Section 198 of the Companies Act, forcing Tata Motors to look for approval from the central government.
“Considering that Mr Butschek’s reimbursement would go beyond the stated limits in the case of no/inadequacy of profits in any monetary year and that he is a German resident and non-resident of India, the approval of the main federal government is being looked for,” said Tata Motors in its yearly report.
Last fiscal year, Tata Motors reported net revenue of Rs 234.23 crore($34,850,379) on a standalone basis. However, by the arrangements of the Section 198 of the Act, the automaker on a standalone basis had a loss of Rs 465.05 crore ($69,185,955), by the business.
