IT services industry still top CEO paymaster; 7 out of 10 highest earning CEOs in India from tech sector

Despite facing challenges in the past two years, the IT services industry remains the highest paying sector for CEOs in India, according to data from BSE 500 companies for FY23. Out of the top 10 highest earning CEOs in the country, seven were from the IT services sector, with salaries ranging from Rs 29 crore to Rs 82 crore, according to an ET analysis.
The highest-paid CEOs and MDs in the IT services industry include Thierry Delaporte of Wipro, Sandeep Kalra of Persistent Systems, Nitin Rakesh of Mphasis, Salil Parekh of Infosys, Sudhir Singh of Coforge, CP Gurnani of Tech Mahindra (outgoing CEO), and Rajesh Gopinathan (former CEO) of TCS. They are joined by Abhay Bhutada of Poonawalla Fincorp, Satish Pai of Hindalco, and SN Subrahmanyan of L&T.

The data encompasses salary, bonus, allowances, commission, and other benefits. C Vijayakumar, managing director and CEO of HCL Technologies, ranked eleventh with a total compensation of $3.46 million (approximately Rs 28 crore) in FY23.

Experts attribute the higher CEO pay in the Indian IT services industry to its global nature and competition with other global companies headquartered in the West. Anubhav Gupta, managing director of Exec-Rem Advisors, stated that CEOs face similar challenges and, therefore, need to be globally competitive in terms of compensation.

Anandorup Ghose, partner at Deloitte India, highlighted that Indian IT services companies often have CEOs based abroad or operating globally to cater to customers outside of India. He also noted that many of these companies are global industry leaders, which justifies higher compensation for CEOs due to their size, geographical reach, and complex business operations. Many of these firms are also listed on international stock markets, prompting shareholders and boards to assess CEO compensation in alignment with peers listed on those exchanges, he said.
Rishi Jhunjhunwala, senior vice president at IIFL Securities, was quoted as saying, “Employee is the only key cost in IT services and, hence, they should be paid more.”

Company boards are now increasingly focused on linking CEO pay to the company’s performance, financials, and market valuation. In FY23, professional CEOs/MDs saw an average pay increase of 6%, compared to the pre-Covid average hike of 7.5% in FY20. The average pay for MDs and CEOs in FY23 was Rs 10.3 crore, up from Rs 9.71 crore the previous year and Rs 9.33 crore in FY21.