Competition of a different kind: JSW Steel now has more 'crorepati' execs than Tata Steel

Tata Steel and JSW Steel are not just competing to become India’s largest steelmaker. The two companies also seem to be in a race to have the highest number of crorepati executives.

These are executives with an annual salary of Rs 1.02 crore or more.

JSW Steel, which will again inch ahead of Tata Steel in terms of capacity – after the Monnet Ispat buy, has also taken the lead in terms of the crorepati executives.

The Sajjan Jindal company now has 79 executives who earn more than Rs 1.02 crore a year, compared to Tata Steel’s tally of 73 executives.

The growth in these top-paid executives has been higher in JSW Steel, which had 41 executives under the bracket in the 2017 financial year. Tata Steel, on the other hand, had 49 executives earnings at least Rs 1.02 crore.

However, the median salary is higher in Tata Steel. While in the Tata company the median salary was Rs 9.45 lakh in the 2018 financial year, in JSW Steel the median level came at Rs 6.25 lakh. But at 9.46 percent, the increase in the median salary was higher in the Jindal company. In Tata Steel, the rise in the median salary was 8.78 percent from a year earlier.

Both the companies have pruned their workforce. While Tata Steel’s workforce reduced marginally from 34,989 to 34,072, that of JSW Steel dipped from 11,848 to 11,619 over the one-year period.

Companies in India are required to report the remuneration of their top employees as per the Companies Act. The requirement was amended two years ago. While earlier the companies were required to report details of all employees earning Rs 60 lakh a year and more, the cut-off was later increased to Rs 1.02 crore.

Record year

The handsome gains in executives’ pay come during a year when both companies posted stellar financial numbers.

Tata Steel’s revenues increased by 13.3 percent, and its bottom line was back in the black at Rs 17,763 crore. Similarly, JSW Steel’s revenue went up by 16 percent, and net profits jumped by 29 percent.

The new financial year has been marked by aggressive steps taken by the two steelmakers to expand inorganically, both within India and overseas. In India, the two companies have found success in the sale of distressed assets, which has led to a constantly changing pecking order.

Once the formal order comes from the National Company Law Tribuanl (NCLT) on the Monnet Ispat acquisition, JSW Steel’s annual capacity will increase to 19.6 million tons from the present 18.1. Just a month earlier, Tata Steel had become the largest in the country after its Bhushan Steel acquisition, which added 5.6 million tons to its annual capacity of 13 million tons.

That pecking order will immediately change if Tata Steel bags Bhushan Power & Steel, another stressed company facing insolvency.