Broke Air India wanted to give fat hike to COO

New Delhi: The Air India (AI) board has shot down a controversial proposal by the airline management that would have resulted in a huge raise for Chief Operating Officer (COO) Gustav Baldauf by tweaking his contract agreement. The proposal comes at a time when the airline, which is saddled with a working
capital debt of over Rs 18,000 crore, has no money to pay salaries to its employees and is surviving on taxpayer’s money.
Baldauf was hired for a hefty package of around Rs 3.1 crore last June resulting in widespread resentment. His net income, post tax deduction, is over Rs 2.16 crore of which 60% is the fixed component while 40% is variable.
"The variable component is payable annually after performance review in relation to laid down parameters. If performance is not up to the mark, the variable component can be withheld. So, while fixed component is the assured income, variable isn't," a ministry official said.
The board's approval was sought on January 19 to revise the fixed-variable component ratio to 70:30. This would have effectively meant a hike of Rs 18.5 lakh for Baldauf.
Financial adviser in the aviation ministry EK Bharat Bhushan is learnt to have opposed the move pointing to Baldauf's hefty package and the fact that he was only a few months into the present job.
09/02/11 Tushar Srivastava/Hindustan Times

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Categories: Air India Feb 2011