Multinational companies are no longer generous when it comes to handing out increments to their employees. In the last three years, the salaries and wages of 46 multinationals studied by the Business Standard Research Bureau rose by a marginal three per cent or so.
Multinational companies gave, on an average, a 5.18 per cent increment in 2002. That growth rate tumbled to 2.65 per cent in 2003 and went up slightly to 3.84 per cent in 2004.
Nor have their CEOs' salaries gone up substantially either in this three-year period. Figures are not available for all the 46 multinationals studied, but the gross salary (including perquisites and commissions) of Nicholas J Massey, managing director of GlaxoSmitkline Consumer, rose by 2.76 per cent to Rs 76.05 lakh (Rs 7.6 million) in 2004.
The gross salary of R Makhija, managing director of SKF India, rose by 8.6 per cent to Rs 1.32 crore (Rs 13.2 million) in 2004. The salary of Hocine Sidi Said, till recently managing director at Pfizer, was Rs 45.89 lakh (Rs 4.6 million) in 2004, down from Rs 46.08 lakh (Rs 4.6 million) in 2003.
The salary of Carlo M V Donati, till recently managing director of Nestle India, climbed by 7.4 per cent to Rs 2.95 crore (Rs 29.5 million) in 2004.
Increments at Hindustan Lever, India's biggest multinational company, declined in 2004 and 2003 after rising a bit by 1.25 per cent in 2002.
Wages and salaries at two other fast moving consumer goods companies, Proctor & Gamble and Colgate Palmolive, increased by less than one per cent in 2004.
Multinational pharmaceutical companies, which traditionally have paid their employees the most, have been leaving no stone unturned to control staff costs.
Wyeth, Merck and GlaxoSmithkline Pharaceuticals cut their staff costs by around three to five per cent in 2004.
Owing to an ongoing voluntary retirement scheme, staff costs at Novartis, Pfizer and Abbott increased by a modest three to five per cent.
Staff costs declined for Kennametal Widia during the last three years. Staff costs at Colour Chem, Bata India, Bayer Crop Science, Castrol, Beck India and Goodricke, too, declined in 2004.
In the same year, staff costs at Bayer ABS, Albright Wilson, Mico, SKF, Wartsila and Nestle rose by a modest 1-3 per cent.
One reason for the marginal rise in staff costs in multinational companies is the demand recession in the personal care sector.
Another reason is the voluntary retirement schemes launched by multinational pharmaceutical firms.
At the 46 multinationals Business Standard looked at, the net sales growth rate remained at around four per cent in the last three years.
And net profits at multinational companies declined in 2004, after growing by around 14 per cent in 2003 and 2002.
Hindustan Lever's net profits, for example, declined by 34 per cent in 2004 while sales dropped by over two per cent.
