TCS employees to make good Rs83 crore shortfall in revenue target

30 January 2008

Mumbai: Tata Consultancy Services (TCS), the country's largest private sector employer and Asia's largest software services firm, has finally decided to pass on the burden of the rising rupee to its employees.

In an e-mail to employees, TCS' head-global human resources and executive director S Padmanabhan said the company has been forced to cut the variable component of the salary packages of its employees as a rising rupee has started impacting its business.

The variable pay component of most TCS employees forms around 30 per cent of the total compensation package, while for senior management - from vice president to higher levels - the variable portion is 40-50 per cent.

This component is paid monthly, based on the company's expected performance for the quarter and is now being reduced by 20 per cent.

He said the company did not meet its internal economic value-addition (EVA) target and the reduction in the variable pay package is aimed at recovering the EVA loss.

"Based on audited results, the EVA-based variable payout amounts to Rs293 crore for the quarter. The actual variable payout based on expected EVA given in advance amounts to Rs376 crore. The advance payment that has to be adjusted amounts to Rs83 crore, which will be recovered during Q4 from the employees," Padmanabhan said in his mail to all TCS employees.