The first wave of COVID-19 not only brought the Indian hospitality industry to its knees it also severely impaired the pay packages of everyone associated with the industry.
Puneet Chhatwal, Managing Director and CEO of Indian Hotels Company (IHCL) took a 50 percent cut in his pay during FY21, details shared by IHCL in its annual report state. The company’s chief financial officer and executive vice president Giridhar Sanjeevi took a 38 percent cut in salary for the same year.
Each of IHCL’s seven non-executive directors including N. Chandrasekaran, Venu Srinivasan, Mehermosh Kapadia, Vibha Paul Rishi and the firm’s Company Secretary and Senior Vice President, Corporate Affairs, Beejal Desai took pay cuts during the same year.
When contacted an IHCL spokesperson replied, “Considering the pandemic related impact and stringent lockdown measures being implemented by the Government, the leadership team including Mr. Chhatwal took a decision as a sign of solidarity to take a voluntary salary cut in remuneration and abstained from proposing any increments for the year.”
The voluntary salary cut was contributed to an initiative called ‘Taj for Family’ that was set up to offer financial assistance and support towards distressed colleagues and their families.
Chhatwal’s remuneration for FY21 stood at Rs 7.22 crore including Rs 3.24 crore incentive remuneration which had not been paid as it was subject to member’s approval. The figures do not include provisions for encashable leave, gratuity and premium paid for group health insurance. The Managing Director, who joined IHCL in 2017, took home a salary of Rs 14.57 crore during FY20.
IHCL further clarified in its response to the Moneycontrol query that as per the terms of employment, Chhatwal is entitled for additional performance bonus to be paid at the end of 2, 4 and 5 years based on measurable improvement criteria set out by the Board as detailed in the employment agreement, entered between the company and Chhatwal.
“The first payout of additional performance bonus was made at the end of FY20, whereas the second payout was not part of Chhatwal’s remuneration for the FY21, as the same will fall due at end of FY22 and will be payable subject to fulfilment of performance improvement criteria as set out under the employment agreement,” the spokesperson added.
IHCL, which runs hotels under the brands Taj, SeleQtions, Vivanta, Ginger, ama Stays & Trails, air catering under TajSATS and some lifestyle retail services, clocked revenues of Rs 1,740 crore in FY21, a drop of 62 percent compared to 4596 crore recorded in FY20. At Rs 720 crore IHCL posted its biggest-ever net loss in a year in FY21.
As of March 31, 2021 IHCL had 221 hotels, more than 400 restaurants across 100+ locations and more than 12 countries.
The Indian hospitality industry has so far suffered a revenue loss of Rs 90,000 crore due to the pandemic, as per research reports published by Hotelivate and HVS Anarock. The revenue per available room (RevPAR) crashed by 57-59 percent and the drop in average daily rate has been 18-20 percent, according to the report.