The board of directors of Tata Steel have proposed a raise for managing director B Muthuraman. Shareholders of the company will vote on the proposal on July 18 at their 100th annual general meeting.
The move comes after Tata Steel acquired the many times bigger British steel giant Corus Group Plc earlier this year.
Philipe Varin, the Corus CEO earns at least fours times that of Muthuraman. Four Corus directors have joined the Tata Steel board while three Tata Steel executives along with three non-executive directors have joined the Corus board.
The notice to the meeting says, “Taking into consideration his present salary and the increase in his responsibilities post acquisition of Corus, the board of directors, based on recommendations of the remuneration committee, recommended the revision in the maximum salary payable to the MD.”
The maximum limit, earlier set at Rs 5 lakh per month (Rs 60 lakh a year) is now being revised to Rs 7 lakh per month (Rs 84 lakh a year).
Apart from this, all directors of the company are entitled to other allowances, cash and non-cash perquisites and contributions to superannuation funds which usually add up to be more than the basic salary mentioned above.
For the year 2006-07, B Muthuraman earned a gross remuneration of Rs 1.97 crore (Rs 16.4 lakh a month) and took home a net remuneration of Rs 1.32 crore (Rs 11 lakh a month).
In comparison, Philipe Varin, the Corus chief executive officer had joined Corus in 2003 at an annual salary of one million euros (Rs 5.5 crore). Apart from this he is entitled to a 30 per cent contribution to a superannuation fund and a minimum of 20 per cent as commission. This would easily take his salary past the Rs 8 crore mark.
Tata Steel has two deputy-managing directors. Deputy managing director (Steel), T Mukherjee earned a gross remuneration of Rs 1.68 crore in 2006-07 while deputy managing directors for (corporate services) AN Singh earned a gross annual remuneration of Rs 1.21 crore.
Muthuraman is slated to be the managing director of the company till September 30, 2009.