SoftBank Group’s chief operating officer Mr. Jonathan Bullock has resigned from the boards of two of the Japanese firm’s most prominent portfolio companies in India, Ola and Snapdeal. Mr. Bullock has also resigned from the board of Housing.com, which counts SoftBank as its largest investor, according to a regulatory filing. SoftBank managing director Mr. David Thevenon is likely to replace Mr. Bullock and join the boards of Ola (ANI Technologies Ltd.) and Snapdeal (Jasper Infotech Pvt Ltd.), according a person directly aware of the developments. Silicon Valley-based Mr. Thevenon, a former Google executive, currently sits on the boards of other prominent start-ups such as Singapore-based ride-hailing firm Grab. In one of the regulatory filings, Mr. Bullock said he was resigning from the boards of both start-ups due to “personal reasons and other obligations.” “Please be informed that due to other obligations, I will no longer continue as a director of ANI Technologies Pvt Ltd and wish to be relieved of my duties and responsibilities with effect from January 16, 2017. Accordingly I hereby tender my resignation which may be accepted at the earliest,” Mr. Bullock said in one of the filings. Mr. Bullock wrote a similarly worded email to the board of directors at Snapdeal and Housing.com. “This is standard procedure and is unrelated to any current operations at Snapdeal, Ola or other boards. SBGI Managing Directors, Mr. Kabir Misra and Mr. David Thevenon, will be the primary leads on Snapdeal and Ola respectively, going forward. Mr Bullock will work actively with Mr Misra and Mr Thevenon, as well as the Snapdeal and Ola leadership, to avoid continuity challenges,” said SoftBank in an email.
Accepting that job creation is India’s central challenge, the Economic Survey has identified apparel, leather and footwear as key sectors to boost employment and provide “bang for the buck” at a relatively low cost. The survey recommended reforms to labour laws and lower taxes on such sectors to boost employment. It said India should take advantage of the low-wage structure in several states to accelerate job creation in sectors like apparel and leather. “India needs to generate jobs that are formal and productive, provide bang for buck in terms of jobs created relative to investment, have the potential for broader social transformation, and can generate exports and growth. The apparel, leather and footwear sectors meet many or all of these criteria and hence are eminently suitable candidates for targeting,” the survey said. Boosting employment generation is a key electoral plank of the National Democratic Alliance government, which is midway through its five-year term. Domestic and global economic factors have impeded job creation. A cash crunch following the 8 November demonetization of high-value currency notes has led to job losses in the informal economy, impacting many small manufacturing units. The survey said that the apparel and leather sectors offer tremendous opportunities for creation of jobs, especially for women. It said every Rs1 lakh investment in the apparel sector had the potential to create 23.9 jobs, including 8.2 jobs for women.
Mr. Madhu Kannan, a former top official at Tata Sons, has joined Uber, the world’s largest taxi aggregator, as its Chief Business Officer for India and Emerging Markets. The 42-year-old Mr. Kannan, who was previously the Chief Executive Officer of the Bombay Stock Exchange, was believed to be a contender for the vacant Chairman’s post at the National Stock Exchange. At Uber, he will be tasked with strengthening Uber’s presence in its second largest market in terms of number of trips taken. “As a key member of Uber’s regional leadership team, Mr. Madhu Kannan will be responsible for growing Ubers business in India as well as across new emerging markets in the Asia Pacific region, through strategic partnerships and investment opportunities,” Uber said in a blogpost. He had been the Group Head of Business Development and Public Affairs at Tata Sons since 2012, but quit soon after Mr. Cyrus Mistry was ousted as the Chairman in October last year. “With his background and experience in India and Asian emerging markets, his appointment reinforces our commitment to continue to invest and grow our presence and unlock the full potential of ridesharing in the region,” Uber President Business (Asia Pacific) Mr. Eric Alexander said. Mr. Kannan, an electronics engineer-cum-MBA graduate, was earlier with Bank of America-Merrill Lynch as MD-corporate strategy and business development and NYSE Euronext as senior vice-president.
Leading stock exchange National Stock Exchange selected IDFC chief Mr. Vikram Limaye as its new CEO and Managing Director, two months after the sudden exit of Ms. Chitra Ramkrishna from the top post. Sources said NSE’s board approved Mr. Limaye’s name for the top position but a formal announcement would be made later as some formalities need to be completed from his side. The approval of the board, chaired by Mr. Ashok Chawla, comes after a four-member search panel suggested Mr. Limaye’s name from amongst the shortlisted candidates. The appointment would also need capital market regulator Sebi’ approval. Incidentally, he was recently named in a four-member panel appointed by the Supreme Court for administering cricket body Board of Control for Cricket in India (BCCI). Currently the Managing Director & CEO of IDFC, Mr. Limaye started his professional career with Arthur Andersen in Mumbai in 1987 and has also worked with Ernst & Young and Citibank. He has worked at Wall Street for eight years with Credit Suisse First Boston before returning to Mumbai in 2004. Mr. Limaye has contributed to various committees of government and industry associations on a range of topics surrounding infrastructure, economic policy, markets and trade. A Commerce graduate, Mr. Limaye has an MBA in Finance and Multinational Management from the Wharton School of the University of Pennsylvania. The appointment comes at a time when the exchange is preparing to launch its IPO estimated to be worth over Rs 10,000 crore.
Company employees receiving large largesse, whether from the company itself or from somebody else, will now have to pay tax if the gift is valued at more than ₹50,000, according to changes made in this Budget, Revenue Secretary Mr. Hasmukh Adhia said . The Finance Bill 2017 has introduced an amendment to Section 56 of the Income Tax Act, which delineates the tax treatment meted out to ‘income from other sources. ’“Right now, there is a provision that if you give a gift to any individual above ₹50,000 then it will be taxed,” Mr. Adhia said. “But that does not apply to companies. Now we have made it applicable to companies as well. People used to take gifts in companies and not pay tax on it.” “The earlier provisions were that if you get more than ₹50,000 from anybody but your close relatives, then the amount was subject to taxation,” Mr. Surendra Prakash Singh, Senior Director at Deloitte India said. “It would not be easy to avoid. It would be very liable to be detected during the scrutiny process, if your case comes up. This is clarificatory in nature and in line with the concept of taxing large gifts, when it was first introduced.”
KPMG India board has elected Mr. Arun M Kumar as chairman and CEO to lead the India operations of the consulting and accounting major. He succeeds Mr. Richard Rekhy, who stepped down in November last year following a large-scale exodus of key people from the advisory team. Earlier in January 2016, Mr. Rekhy had been re-elected for a four-year term. Mr. Kumar joins the firm at a time when the Big Four accounting and audit firms are jostling for market share following mandatory rotation of auditors as prescribed under the Companies Act 2013. Last year, Deloitte, the market leader in the audit space, had weaned away key people from KPMG’s advisory team. Deloitte is in the process of strengthening its advisory practice in India. Mr. Kumar brings a wealth of international leadership experience to KPMG India, including his tenure in public service in the United States for the last three years as Assistant Secretary of Commerce for Global Markets and Director General of US and Foreign Commercial Service in the Obama administration. Commenting on the appointment, Mr. John Veihmeyer, chairman, KPMG International, said, “Our global clients recognise the increasing significance of India as the fastest growing major economy in the world. I am delighted to welcome Arun back to KPMG.”
Mr. Balesh Sharma has been appointed as the new Chief Operating Officer of Vodafone India, and will take over the post from Mr. Naveen Chopra, who held the COO position since February 2015. A spokesperson from Vodafone confirmed the development. Mr. Chopra’s next role with Vodafone is yet to be announced by the company. He joined Vodafone in November 2004 as Vice President of Corporate Marketing. Between 2007 and 2008, he headed Vodafone Mumbai’s operations a CEO for a year. He also held additional managerial roles including Mumbai, Rajasthan circles until 2011. Prior to Vodafone, Mr. Chopra was with Britannia Industries for 16 years, where he headed marketing for the company. On the other hand, the substituting COO, Mr. Sharma currently heads Vodafone’s Czech operations as CEO. He originally joined the company as CEO for Gujarat circle in 2006. Prior to Vodafone, Mr. Sharma worked with companies like BPL Mobile and Xerox.
The bank employees working under the payroll of central government may have one good reason to rejoice because the order has been issued to ensure that they get Dearness Allowance (DA) as per the recommendations of the 7th Pay Commission (7CPC). The order issued on February 1, says that the DA to be paid for the month of February, March and April this year. The Indian Banks’ Association (IBA) which released the executive order on February 1, to all banks under it, said: “Dearness Allowance for workmen and officer employees in banks for the months of February, March and April 2017 under X BPS /Joint Note dated May 25, 2015.” The order further added, “The average CPI of the above is 6315, and accordingly the number of DA slabs is 469.” The order release by Indian Bank Association then goes on to explain that the DA bank employees and officials should get at least 46.9 per cent of their pay and concludes: “We advise banks to pay the difference between the old and revised salary and allowance to officers on an ad hoc basis, pending amendments to Officers’ Service Regulations. ”The order has already been sent to the Indian Banks Association to all banks under it, the onus is now on the banks to ensure that their employees will get the DA component in their salaries of February, March and April as per the new scale. Some reports suggest that there should not be much of a hurdle on that front unless some unforeseen circumstance halts the process.
Barclays Plc is about to overhaul its back office operations under a restructuring to help it comply with new post-crisis rules forcing British banks to ring-fence their retail operations from their riskier business. It has formed a new company that will operate as a standalone unit providing support services to both of its two main operations when they are formally separated — retail and investment banking, the bank said. The ring-fencing rules seek to avoid a repeat of the 2008 crisis, when banks’ bad bets threatened depositors’ cash. While Barclays was not among those that needed a UK taxpayer-funded bailout, the new rules apply to all lenders in Britain that have retail and commercial or investment banking activities. At Barclays, the aim is that critical support functions could continue to operate smoothly if either of its two main businesses were to run into trouble, while also keeping costs down by not having several separate back-office units, sources involved in the project said. The overhaul — including the creation of the new company known internally as ServCo — will affect most of the more than 10,000 people who work in Barclays back offices operations in 17 countries around the world. It will group together the bank’s huge operations in India and South Africa that provide technology support and data management, along with functions such as compliance with regulatory requirements, corporate relations, legal affairs and human resources. While for some staff this will simply involve a change in the name of the legal entity they work for, the sources said it was also likely to lead to some job losses.
In its bid to arrest the high attrition levels and encourage them to do more business, the national insurer Life Insurance Corporation has hiked gratuity for its over a million agents to Rs 3 lakh. The Corporation makes as much as 94 per cent of its premium income through its over 1.1 million agents, while the private sector rivals net around half their business through the agency route. During the past financial year, the Corporation recruited 2.45 lakh agents but as many as 3.40 lakh agents got terminated or voluntarily let during the year. As of March 2016, the Corporation had 10.60 lakh agents, while this rose to 11.05 lakh as of end January. But this year so far, the Corporation has added 45,000 agents on net basis. “So far this financial year, we recruited 2.7 lakh agents while 2.25 lakh were terminated/voluntarily left the Corporation, which is a net addition of 45,000. This takes our total agency strength to 11.05 lakh as of end January,” an LIC official said. “Gratuity payable to an agent shall be at the eligible rate for each qualifying year for the first 15 qualifying years and at half the eligible rate for the subsequent 10 qualifying years, provided the maximum amount of gratuity payable shall not exceed Rs 3 lakh,” said a Gazette of India notification. Under the existing rules, an LIC agent gets Rs 1 lakh as gratuity on leaving the service after 15 years. On an average an agent gets 35 per cent commission on the premium sold and 2 per cent on single premium policies.
As many IT firms are grappling with changes and changing the ways of doing business, Tech Mahindra is also not new in this. In the latest move, Tech Mahindra has suspended appraisal cycle for its senior employees. The announcement was made on a webinar chaired by its Chief Operating Officer Mr. L Ravichandran. It also said the affected employees will have to wait at least two quarters for a salary hike. “We thought the wage increases would be very bad but we did not expect this. At least there are no large scale layoffs so far. That was also a worry,” said a TechM employee. Others said that people were agitated about the move and that internal messaging groups were flooded with discussions about the announcement. The move has been confirmed by TechM but the company also cleared that the appraisals had not been postponed indefinitely and that the affected employees would be informed about their hikes after a management review. “This decision is not related to our performance in the third quarter. This was an item of discussion and once there is a management review, the employees will be informed,” a TechM spokesperson said. According to an analyst, TechM is increasing its fresher intake to manage its pyramid and boost its margin. “Indian IT has a problem because their pyramid is more bulky than it was in the middle. You don’t want the freshers to leave because you have invested in their training but if you can create a situation in which more senior employees start looking to leave then it works in your favour,” an industry executive said.
US coffeehouse chain, Starbucks has pledged to hire 10,000 refugees over the next five years in the 75 countries where it does business in response to President Mr. Donald Trump’s order banning travel from seven Muslim majority countries, the media reported. “We are living in an unprecedented time,” chairman and CEO Mr. Howard Schultz wrote in a memo, which listed several actions the company said it was taking to “reinforce our belief in our partners around the world.” The refugee hiring proposal, Mr. Schultz wrote, will begin with a focus on people who have served with US troops as interpreters and support personnel. Mr. Schultz also reiterated Starbucks’ support for the Deferred Action for Childhood Arrivals programme (DACA), which helps undocumented immigrants who were brought to the US as children get driver’s licenses, enrol in college and secure jobs. The programme was created by former President Mr. Barack Obama through an executive order in 2012. Mr. Schultz also said the company was “ready to help and support our Mexican customers, partners and their families” should any proposed trade sanctions, immigration restrictions and taxes affect their businesses. “We are in business to inspire and nurture the human spirit, one person, one cup and one neighbourhood at a time,” Mr. Schultz wrote. “That will not change. You have my word on that.”
With a number of start-ups collapsing mid-way, many employees are now preferring bonuses instead of Employee Stock Option Plans (ESOPs) as part of their compensation package, industry experts said. “We have seen a change where the ESOP component in compensation packages has dropped in start-up companies. This is because they never reach the valuations they initially project and in the past year, a lot of start-ups also had to close businesses. “Since around the end of 2016, we have been witnessing a change from ESOPs to variable bonuses in terms of compensation in these companies,” Mr. Mohit Bharti, Director of professional recruitment consultancy Michael Page India said. This trend is seen across the start-up industry, including e-commerce, food, technology, logistics and financial services, Mr. Bharti added. Echoing a similar view, GlobalHunt Managing Director Mr. Sunil Goel said, with many start-ups collapsing gradually, employees started relying on cash component. “Bonuses are generally short-term component, paid either yearly or quarterly, and is becoming an attractive option even if it is one-third or one-fourth of the value as compared to the ESOPs,” he pointed out. But, Mr. Goel said, start-ups are now at a consolidation phase with lot of buyouts, mergers and acquisitions, so ESOPs might be more beneficial in the long run. TeamLease Services Senior Vice-President Mr. Kunal Sen opined that this has been the trend in the last 1-2 years with declining valuations of e-commerce and tech start-up performance. He said ESOPs will form a lower component in the compensation of top talent going forward, as earlier top talent would agree to a 30-50 per cent salary cut and opt for ESOPs, but not these days.
With American President Mr. Donald Trump seemingly adamant on sticking to his inauguration pledge of “Buy American, Hire American”, Indians working in the US are starting to eye jobs back home. Some recruitment firms have reported doubling of queries from US-based Indian professionals in recent weeks, according to reports. With Mr. Trump turning into his rhetoric into action in recent weeks, recruitment firms led by BTI Consultants, RGF Executive Search, Transearch, The Head Hunters and Antal International have been receiving frantic calls from Indians in the US. Indian companies, particularly IT companies who have a sizeable US employee base, are also a nervous lot after a Bill introduced in the US House of Representatives proposed to more than double the minimum wages to USD 130,000 for foreigners working in US under the H1B visa. The report quoted Mr. Kris Lakshmikanth, chief executive of The Head Hunters (India), as saying that he had received around 30 calls until now from technology professionals exploring opportunities back in India. Until a couple of months ago, he said he had not received any such query. He said that most of the queries are from those who have completed three years in the US, after which an H1B visa extension is required, and those who are approaching the six-year period and are unsure about whether they will get a visa extension.
The board of Infosys Ltd has inducted director Mr. D.N. Prahlad into the nomination and remuneration committee (NRC) that oversees the nomination process and the incentives and pay offered to its senior-most executives, including the chief executive. Mr. Prahlad, a relative of Infosys founder Mr. N.R. Narayana Murthy, will now be one of the five members of the current NRC, according to two executives familiar with the development; the decision may make it more difficult for the management to award higher salaries to its senior executives. Infosys’s nomination and remuneration panel is headed by independent director and Professor Jeffrey Lehman, and includes three independent directors: Biocon chairman and managing director Ms. Kiran Mazumdar-Shaw, Stanford University provost Mr. John Etchemendy and non-executive chairman Mr. R. Seshasayee.
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