The purpose of this Policy is to establish principles, parameters and Governance framework of remuneration for Directors, KMPs, Senior Management Personnel and Employees. This policy will assist the Board and Nomination and Remuneration Committee ('NR Committee') to fulfil its responsibility towards attracting, retaining and motivating Directors, KMPs, Senior Management Personnel and Employees through competitive remuneration in line with the corporate and individual performance. The policy has been framed in compliance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI regulations").
The main objectives of this Policy are:
The remuneration paid to Executive Directors to be recommended by the NR Committee and approved by the Board, subject to the subsequent approval by the shareholders at the general meeting and such other authorities, as the case may be.
At the Board meeting, only the Non-Executive and Independent Directors shall participate in approving the remuneration paid to the Executive Directors. The remuneration is to be arrived by considering various factors such as performance, qualification, experience, prevailing remuneration in the industry and the financial position of the company. The elements of the remuneration and limits shall be pursuant to the applicable laws.
The remuneration structure for the Executive Directors would include the following components
Basic Salary
Commission
Perquisites and Allowances
A basket of perquisites and allowances would also form a part of the remuneration structure.
Contribution to Provident and other funds
In addition to the above, the remuneration would also include:
Minimum Remuneration
If in any financial year during the tenure of the Executive Directors, the Company has no profits or its profits are inadequate, they shall be entitled to minimum remuneration as prescribed under the Companies Act, 2013.
The Non-Executive Directors and/ or Independent Directors of the company would be paid sitting fees as determined by the Board from time to time for each meeting of the Committees and Board. The NR Committee/ Board shall review and revise this limit, if there are any changes in the limits/provisions of law.
The Non-Executive and/ or Independent Directors will also be entitled to remuneration by way of commission aggregating up to 1% of net profits of the Company pursuant to the provisions of Sections 197 and 198 of the Companies Act 2013 in addition to the sitting fees for attending the meetings of the Board and any Committee thereof.
The compensation for the Key managerial personnel, senior management and other employees at Hero MotoCorp would be guided by the external competitiveness and internal parity through annual benchmarking surveys.
The compensation will inter‐alia include basic salary, allowances, perquisites, loans and/or advances as per relevant HR policies, retirement benefits, performance linked pay‐out, benefits under welfare schemes, etc.
All employees of Hero MotoCorp will be subject to annual performance review as per approved performance management process of the company. Meritocracy will be promoted by ensuring rigorous performance differentiation. The rating obtained by an employee will be used as an input to determine variable and merit pay increases. Variable and merit pay increases will be calculated using a combination of individual performance and organizational performance. Grade wise differentiation in the ratio of variable and fixed pay as well as in increment percentage will be made.
Other factors that will determine compensation will be criticality of skills, availability of competitive skills in the talent market globally.
Appropriate salary band and grade structure will be designed to ensure the organization is managed efficiently and effectively. The structure will be reviewed by the company’s leadership from time to time.
With the objective of building a high performance culture at Hero MotoCorp, the performance management system shall be designed to:
The goals will be derived from the Company’s long term vision that shall be translated to medium term plans and then an Annual Business Plan.
These goals will be cascaded to the functional heads and from them, to their reporting managers and employees.. Similarly, the senior management’s performance will also be contingent on their leadership, guidance and also the achievement of the goals of their teams.
The employees will be rated on the basis of achievements of these goals and also a defined competency framework. The weightages of these depend on the level within the organization as determined by the management from time to time.
This policy will be reviewed at appropriate time, as decided by the NR Committee and with the approval of the Board. The utility and interpretation of this policy will be at the sole discretion of the NR Committee/Board.