No slowdown impact on CEO salaries at IT cos

Revenue growth has slowed down across the industry. Large IT firms reported low single digit growth, while mid-tier players have seen substantial slowdown. Even, Nifty IT index was one of the underperformers in 2023. Despite this, remuneration of most CEOs has increased

Bengaluru: Annual compensation of Indian IT firms’ CEOs didn’t see any drop in FY24 despite IT industry facing a difficult demand environment. Data shared by domestic IT services companies in their annual reports indicated that most CEOs took home higher salaries in FY24 than the previous fiscal. Even median salary gap showed no signs of contraction as entry-level compensation took a hit after showing some rise in post-pandemic years.

During the last fiscal year, Infosys CEO Salil Parekh witnessed a remuneration increase of over 16 per cent, though the company clocked a growth rate that was at a decadal low. Parekh drew Rs66 crore as stated in the company’s annual report as compared to Rs56.4 crore drawn in FY23. Infosys’ revenue slowed down to 1.9 per cent during the last fiscal year.

Similarly, former Wipro CEO, Thierry Delaporte received a total of $20 million (Rs166 crore), with a major portion of this amount, Rs92.1 crore, being part of a severance-related package. This made him the highest-paid IT CEO in the country. Wipro, which saw Delaporte’s exit last fiscal year with new CEO Srinivas Pallia taking over, reported a fall of 4.4 per cent in revenue during the last fiscal year.

Despite being the market leader, Tata Consultancy Services’ CEO salary has been historically lower than its smaller peers. In FY24, TCS’ CEO K Krithivasan’s overall remuneration was at Rs25.2 crore.

Not only big firms, even mid-tier IT companies also saw an increase in CEO compensation though they reported fall in their growth rates as compared to past years.

In the fiscal year ended March 2024, LTIMindtree’s CEO Debashis Chatterjee saw a 10 per cent increase in his total annual compensation at Rs19.34 crore. While Chatterjee’s fixed pay amounted to Rs9.33 crore, the variable compensation was at Rs9.9 crore during this period.

Engineering services firm, L&T Technology Services’ CEO Amit Chadha’s compensation surged from Rs7.3 crore in FY23 to Rs15.4 crore in FY24, which was a rise of 100 per cent over the previous fiscal year.

“Revenue growth has slowed down across the industry. Large IT firms reported low single digit growth, while mid-tier players have seen substantial slowdown. Even, Nifty IT index was one of the underperformers in 2023. Despite this, remuneration of most CEOs has increased owing to higher variable component and cashing in of stock options,” said a source in the HR industry.

“Though salaries of top executives are matching the global standards, entry-level salary of Indian IT industry is yet to see any meaningful rise. Such disparity may not be sustainable in the long-run,” the person add