Plan covers 100 execs; fixed pay at 80-85%, rest based on staff performance, firm’s profitability
is introducing 15-20 per cent variable pay component for its top management as it looks to save on its wage bill.
The Mumbai-headquartered airline has a higher cost structure than other listed domestic airlines and is undertaking cost control exercises to remain nimble. The variable pay scheme will be applicable to around 100 senior executives of Jet Airways and is expected to result in annual savings of Rs 25-30 crore, an airline source.
While the fixed salary component will be 80-85 per cent, the remainder will be linked to employee performance and airline profitability. The senior executives will also not receive salary increment this year.
A Jet Airways spokesperson did not offer immediate comments.
Some of Jet’s peers already have a variable pay scheme in place. Vistara and SpiceJet too have variable pay for its senior management. Air India a productivity linked incentive scheme which was a variable pay out in mid-1990s but the same was discontinued in 2012.
Jet Airways has a staff strength of around 15,000 and had a wage bill of Rs 2,316 crore in the first nine months of FY 17. Employee costs rose 26 per cent on a year on year basis for the period. The airline has around 2000 pilots on its rolls whose salaries account for nearly half of the wage bill.