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Satyam withdraws variable pay

HYDERABAD: Chief Executive Officer of the crisis-ridden Satyam Computer Services A. S. Murty, fully backed by the board of directors, is cracking the whip. After announcing a slew of cost-cutting measures over a week ago, he has administered the bitter pill in the form withdrawal of variable pay to all employees from April 1, as “primary costs of the company are people-related.”

In an e-mail addressed to the staff on Monday, Mr. Murty said only the minimum guaranteed amount of 25 per cent would be paid towards variable pay for the third quarter (October, November and December 2008) and the fourth quarter (January, February and March 2009) to all associates.

The variable compensation policy would be withdrawn for all employees from April 1, though the fixed compensation would continue undisturbed. A revenue-linked allowance would be introduced from April 1 only for associates working in approved ‘billable’ roles and who were allocated to billable customer projects.

Through this scheme, an amount equivalent to 100 per cent of that defined by the former variable compensation policy (as applicable prior to its withdrawal and suspension) would be paid on a monthly basis (pro-rated for the period of billability) to eligible associates as set out in the policy.

Mr. Murty said maintaining a healthy balance between achieving aggressive goals, retaining talent, and lowering expenses, was the key. Urging the employees of all levels to contribute to the financial restructuring of Satyam, he said job security and job retention were to be given the highest priority in spite of temporary inconveniences.

However, cost optimisation efforts should not come in the way of recognising ‘extraordinary and exemplary performance’. Expressing his gratitude to the staff for offering to partake in the efforts, he wanted them to explain the rationale for this inevitable measure to their respective families and seek their support and understanding during the difficult phase.

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