The top management of India's second largest tyre manufacturer Apollo Tyres has decided to take a salary cut to help the company fight the crisis due to the coronavirus outbreak.
The company's two main promoters, patriarch Onkar Kanwar (chairman and managing director) and his son Neeraj Kanwar (Vice Chairman and managing director) have decided to take a 25 per cent cut in their pay while other top executives who are part of the company's senior management will also take a 15 per cent pay cut.
"This is an incredibly difficult time for our employees and their families. We are in unchartered waters but as 'one family' we will work together and make the necessary sacrifices to steer Apollo Tyres in the right direction, to overcome this period," said Onkar Kanwar. "We are experiencing slowing demand and disrupted supply chains due to COVID-19. We are working on further measures which we will provide updates on, as we make final decisions."
The company did not specify the extent of the impact due to the virus on its operations but said the worst was yet to come.
The father-son duos are among the highest paid promoter CEOs in the country. In 2018-19, Onkar and Neeraj Kanwar drew a gross salary of Rs 39.2 crore and Rs 34.5 crore, respectively. The promoters also got into a tiff with minority shareholders in mid-2018 over high compensation at a time when the company's financial performance had moderated. Matters came to a head on the issue of reappointment of Neeraj Kanwar as the managing director of the firm. It was finally resolved after the duo agreed to take a 30 per cent pay cut.
The prolonged slowdown in the country's automobile sector, which is expected to get worse due to the pandemic, has already seen Apollo Tyres go into an austerity drive. It has pruned its capital expenditure plans for the current fiscal by Rs 300 crore to Rs 2,400 crore and has said it would likely invest only Rs 1,400-1,500 crore next fiscal.