Tata Sons Chief Forgoes Pay Hike as Air India Losses Mount, June 18

Tata Sons Chairman N. Chandrasekaran declined a salary increase for FY26 during a board meeting on June 12. The decision reflects the group’s focus on capital allocation and improving profitability at newer businesses. In FY25, Chandrasekaran earned ₹155.8 crore in total remuneration, up 15% from the prior year. The move comes as Air India posted its largest loss since the Tata Group’s 2022 acquisition.

Why the Chairman Stepped Back

Chandrasekaran informed the Nomination and Remuneration Committee at the June 12 board meeting that he would forgo a pay hike for FY26. The decision aligns with the group’s push to prioritize capital allocation and boost profitability across recently launched businesses. In FY25, his total remuneration stood at ₹155.8 crore, with ₹15.1 crore from salary and benefits and ₹140.7 crore from profit-linked commission.

Air India’s Turnaround Challenge

Air India reported a full-year loss of ₹26,800 crore in FY26, its largest annual deficit since the Tata Group acquired the airline in 2022. During board discussions, Tata Trusts Chairman Noel Tata questioned the airline’s high capital consumption. Chandrasekaran presented a three-year turnaround plan that includes deferring aircraft deliveries, rationalizing routes, and recalibrating fleet expansion to manage cash flows better.

Mixed Financial Results at the Group Level

Tata Sons posted FY25 revenue of ₹5.92 lakh crore, a 24% increase, but net profit fell 17% to ₹28,898 crore. The group remains heavily reliant on Tata Consultancy Services, which contributed 43% of net profit in FY25. Tata Trusts Chairman Noel Tata had earlier raised concerns about capital committed to new-age businesses, though he acknowledged Tata Electronics as strategically aligned with India’s manufacturing goals.

Leadership Continuity Ahead

Chandrasekaran has led Tata Sons since 2017, and his current term ends in February 2027. The board meeting on June 12 lasted nearly four hours and included all six board members, including industrialist Venu Srinivasan. The board approved the company’s annual accounts and dividend for FY26 during the session.

Final Thoughts

Chandrasekaran’s pay restraint signals serious concerns about group profitability and capital efficiency. With Air India bleeding ₹26,800 crore annually and TCS carrying 43% of group profits, the conglomerate faces structural challenges that extend beyond executive compensation.

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