MUMBAI: Cadbury India has cut the pay of its managing director and some other senior executives in 2012, when the country’s largest chocolate maker saw its slowest growth in profit and sales in over six years.
Annual remuneration of Anand Kripalu, India head of Cadbury India’s parent Mondelez International, was down 35% at Rs 7.14 crore in 2012 compared with what he took home the previous year, according to Cadbury’s latest annual report sent to minority shareholders, who have been disputing its delisting plans for a decade. Kripalu, who joined the maker of Dairy Milk and Bournvita seven years ago, was heading India and South East Asia until last year before being redesignated as India MD in 2013.
Some other senior executives, including R&D head Atul Bhatia, HR head Rajesh Ramanathan and Narayan Sundararaman, head of powdered beverages, gums and candy, too, took salary cuts, though not as stark as their boss (see graphic). ACadbury India spokesperson did not respond to specific queries on whether the cut in remunerations was influenced by or linked with lower profits and sales growth. The spokesperson said the company does not discuss remuneration of any individual as a matter of policy.
“Our reward philosophy emphasises a total remuneration approach, which includes multiple components for senior management like fixed pay, perquisites, retirement benefits, global performance linked pay and global equity programmes,” the spokesperson said. “Structure and payout of some of these are globally governed and may influence the total remuneration in a particular year. For example, the date of vesting of global stock may have no relationship to the performance, but may impact total remuneration for a particular year.”
The cut in remuneration was not across the senior management team. Executives such as snacking and strategy head Chadramouli Venkatesan, finance head Frans Ryden, supply chain head Neel Kant and legal affairs director Sree Patel saw their annual remunerations increase anywhere between 12% and 65% last year.
While Mondelez handed its India head a salary cut, its global rival Nestle increased remuneration of its India head Antonio Helio Waszyk by 11% to Rs 9.46 crore despite it reporting seven-year low sales and profit growth numbers at 11% each in 2012.
Cadbury India, which consistently outperformed the overall FMCG market over the past few years, experienced the first hints of a slowdown last year, its first year under Mondelez International. Its revenues increased 20.8% to Rs 4,065 crore in 2012, the lowest growth rate since 2006 and a sharp deceleration from the 34.4% growth recorded in 2011. Profit after tax increased just 2.1% to Rs 303.4 crore.
With growth rate still better than peers, Cadbury’s results generally have been dampened by the rupee’s devaluation and rising commodity prices that hampered its profitability, the annual report said. The company also invested in expanding rural distribution and spent heavily on visi-coolers, increasing their count from 2,000 three years ago to over 60,000 units now to support the supplies of premium chocolates such as Silk and Bournville. This also impacted profits. (Source:ET)
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