As India’s $150-billion information technology (IT) industry grapples with slowing revenue growth and massive layoffs, its executives are also feeling the heat.
The annual reports released so far by a number of top companies for the 2016-17 financial year show that many IT leaders have seen a drop in their earnings, largely because of a decline in the bonus and performance-linked components of their salaries. High-level executives typically earn a variable pay that is linked to the annual performance of the company and which accounts for a huge chunk of their total salaries. But with revenue and profits being dragged down by factors such as protectionist measures in key markets, and automation threatening jobs, the sector is clearly struggling.
For instance, even as Infosys’s COO UB Pravin Rao saw a small spike in his earnings for the year, CEO Vishal Sikka saw a drop as the company failed to meet its growth targets. His bonus and incentives (pdf) for the year were at $0.8 million, compared to $4.3 million in 2015-16. At Wipro, the total compensation of chairman Azim Premji fell by 63% as profits slowed, and he did not receive his usual commission linked to the company’s incremental net profit this year.
At Tata Consultancy Services (TCS), India’s largest software services firm, former CEO N Chandrasekaran, too, earned less money than a year ago, when he received a special one-time bonus. Chandrasekaran has now become the chairman of TCS’s parent firm, Tata Sons, where his current basic salary is reportedly lesser than his TCS pay, not including the performance-linked bonuses. Former CFO Rajesh Gopinathan has now taken over as the TCS CEO and managing director, and the increase in his salary for 2016-17 reflects the same.
Here’s a look at how much some of these top bosses earned during the year ended March 31, 2017. The figures include bonuses, other variable pay, stock options, and incentives, and are sourced from company annual reports:
Of late, the huge salaries and increments given to executives have drawn criticism from industry veterans such as Infosys co-founder NR Narayana Murthy. In April, Murthy argued that C-suite executives often get fat pay hikes which are significantly larger than what an average employee gets. Senior-level executives have to “fight for maintaining a reasonable ratio between the lowest salary and the highest salary in a corporation in a poor country like India,” he wrote in a letter, hinting at his displeasure over the increment Infosys had approved for COO Rao.