Around 28,000 employees of erstwhile Satyam Computer Services will have their variable pay restored from October this year. The move by the management of Mahindra Satyam, the new owners of the stricken Satyam marks the beginning of a recovery phase in the fortunes of the firm that was in deep financial distress since January this year.
Sweeteners such as performance-based employee stock option plans (Esops) for senior and middle-level associates, staggered cash bonuses for select employees at the junior level and welfare allowances will also be reinstated by the management. The payouts due to these extra allowances are not expected to significantly dent the firm's finances as it had cut salaries of 7,000 associates placed on the virtual pool, according to a senior official.
Other reinstated benefits include staff welfare allowance every quarter and service anniversary programs according to the company's filing with the Bombay Stock Exchange.
Earlier this week, the company's board approved the allotment of 1,02,566 equity shares under its stock option plan.
Satyam suspended variable pay in April this year to pare costs as revenues came under pressure with disgraced Satyam chief, B Ramalinga Raju accepting fudging of the IT firm's books for several years.
The remuneration package at Satyam comprised fixed and variable components with the variable component being 10 per cent at the entry level, 20 per cent at the middle level and 30 per cent at the senior management level. Half of the variable component is a guaranteed-payment while the other half is linked to three parameters, including the performance of the company, the individual and the business unit.