Corporate Grapevine     

Published: August 31, 2025
Updated: August 31, 2025

Tata Sons’ profits fall, Chandra’s pay rises!

Tata Sons Ltd, the holding company of India’s largest conglomerate, has handed its top leadership a double-digit pay hike even as its own profitability slumped in FY25 — raising questions on the alignment between executive compensation and shareholder returns.

Executive Chairman N. Chandrasekaran took home ¹ 155.81 crore in total compensation in the year ended March 2025, a 15% increase over FY24, making him one of India’s highest-paid executives. His package included ¹ 15.1 crore in salary and a hefty ¹ 140.7 crore in commission linked to profits. In percentage terms, the commission rose to 0.6% of net profit in FY25 from 0.4% a year earlier.

The hike came as Tata Sons’ net profit crashed 24.3% to ¹ 26,231 crore from ¹ 34,654 crore in FY24, according to the company’s annual report. Revenues also slipped to ¹ 38,835 crore from ¹ 43,893 crore a year earlier, when the group booked nearly ¹ 9,376 crore from investment sales. Return on equity fell sharply to 19.1% from 32.2%.

Despite this performance, not only did Chandrasekaran’s pay rise, but all other board members also benefited. Executive Director Saurabh Agrawal received a 7.7% hike to ¹ 32.7 crore, while commissions for the rest of the board climbed 6.7%.

RAISED EYEBROWS

The optics are troubling: shareholder earnings and profitability are on a downward trajectory while leadership pay expands. While the company highlighted its debt repayment and dividend payout — an eye-popping ¹ 64,900 per share for FY25, nearly double the previous year — critics may argue that the group is rewarding management even as its financial base weakens.

Tata Sons remains one of the most influential entities in corporate India, controlling listed crown jewels like Tata Consultancy Services and Tata Steel. But with its profits under pressure and governance questions being raised globally about executive pay fairness, the group risks criticism for rewarding top brass disproportionately in a year of declining performance.