Despite the company being in the throes of debt, it still manages to offer a 50% hike in salary of its chairman
You have to hand it to Tulsi Tanti, chairman of the debt-laden Suzlon Energy. The company is not just neck deep in debt, the debt levels keep rising—the interest cover, needless to say, is negative. Its revenues have fallen 11% between FY12 and FY13 while net losses have risen 10 times and net worth has fallen 95%—from R4,978 crore in FY12 to R320 crore in FY13, a number that is lower than even its equity capital. Its net worth, to put this in perspective, was R8,532 crore in FY09, after which a string of mishaps hit the company.
In such a situation, when it was time to renew Tanti’s term as the company’s chief, it was only natural that most proxy advisory firms recommended the shareholders vote against this. Not only did shareholders not pay heed to this, they increased Tanti’s salary from R2 crore to R3 crore. A R1 crore hike in salary, it is obvious, is not going to make much of a difference to a company whose FY13 losses were R4,724 crore. But there is a psychological impact of a Tanti getting a salary hike and a Tanti taking a pay cut, perhaps even getting the boot. PSU banks that have lent him good money and have restructured his debt need to be asked how they allowed this to happen. The fact that they did, of course, explains why NPAs plus restructured assets rose from 8.9% of advances in FY12 to 11.1% in FY13 for PSU banks.