COVID-19 impact: IDFC First Bank senior management takes 10% compensation cut in FY21; pays 100% variable pay to 78% staff

After Kotak Mahindra Bank slashed the pay of its staff in the wake of the ongoing COVID-19 pandemic, yet another private lender, IDFC First Bank, said on Monday that its senior management volunteered to take a 10 percent cut in compensation during the current financial year 2020-21.

Managing Director and CEO V Vaidyanathan has voluntarily offered to take a pay cut of 30 percent in his compensation, including fixed compensation as well as all allowances, reported ANI

"Such pay cut forms part of the bank's austerity measures which start at the top," he said.

Representational image. Reuters.

"Further, we feel the pain our customers, big, small, micro enterprises and people at large are going through, and we also want to be empathetic to the situation."

On the employee front, the bank said it has honoured all offers that were made to new hires before the pandemic, including all lateral hires as well as 550 management trainees.

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It also paid 100 percent of the variable pay to 78.2 percent of employees for FY20. Variable pay for FY20 was cut more progressively for employees with greater seniority and bonus for senior management was cut by 65 percent of the eligible amount.

In addition, the lender contributed Rs 5 crore to the PM CARES Fund to support the nation's fight against coronavirus.

Early this month, Uday Kotak-led Kotak Mahindra Bank announced a 10 percent pay cut for its employees earning above Rs 25 lakh per year, reported CNBC TV18.

The bank said that it would not cut the compensation of those staff who are drawing less than Rs 25 lakh per year will not see any reduction in their salaries.

Last month, Kotak Mahindra Bank had announced a 15 percent pay cut for its leadership team and also revealed at the time that chairman and managing director Uday Kotak would forego salary for a year and take token Re 1, the report said.

Several companies including public sector entities declared pay cuts of its employees after coronavirus pandemic cases rose in the country forcing the Centre to declare national lockdown, which impacted most of the business activities.

--With inputs from agencies