From Coding Cubicles to Corner Offices: India’s IT CEO Pay Gap Hits a New High Score

India's tech sector is experiencing a record-breaking rise in CEO-to-median employee compensation ratios, with new data indicating unprecedented gaps at some of the country's best-known tech companies. Despite sluggish growth and austerity, executive compensation has risen meteorically, stoking debate regarding compensation equity and company priorities.

 

Key Highlights

CEO Compensation Multiples Hit All-Time Heights:

Wipro CEO Thierry Delaporte received 1,703 times the median employee salary in FY24, the highest in Nifty50 companies. The CEO compensation ratio for Tech Mahindra was 1,383 and the C Vijayakumar of HCLTech received 707 times the median compensation.

 

Massive Pay Rises at the Top:

HCLTech CEO saw a 190% year-over-year growth, for FY24 reaching ₹84.16 crore, making him the most highly paid Indian CEO. Infosys CEO Salil Parekh saw a 22% hike in remuneration to $6.7 million as the company suspended new hiring and let go of employees.

 

Flat Employee Salaries:

While CEO compensation increased more than 160% in five years, salaries of freshers in leading IT companies increased just 4%, from ₹3.6 lakh to ₹4 lakh. CEOs' median annual package reached ₹10 crore, with average CEO compensation at ₹13.8 crore.

 

Performance-Based Pay Creates Inequality:

Variable compensation and long-term incentives contribute 60% of executive compensation, fueling the inequality. In some firms, the ratio is more than 400:1, which is a reason for concern for equity and morale.

 

Industry and Investor Response:

The widening gap has stirred web debate and public complaint from institutional investors and HR practitioners. While companies justify reward on the basis of performance, calls for greater transparency and equitable pay are increasing. The Bottom Line With India's IT sector leading digital transformation, the distance between workers' salaries and boardroom pay has never been broader. As CEO multiples are at an all-time high, the industry is under more pressure than ever to address pay inequality and fuel sustainable talent retention. 

 

Source: Financial Express, Moneycontrol, Statista, Times of India, Economic Times, WION