Infosys CEO’s Salary Increased To Rs 21 Lakh/Day! At Rs 78 Crore Annual CTC, His Salary Is 872-Times More Than Median Employee Pay

Infosys CEO Salil Parekh’s compensation has increased 88 percent to Rs 79.75 crore a year, making him the highest paid IT CEO in India.

How Other CEOs Fare

In comparison, Rajesh Gopinathan, chief executive of Tata Consultancy Services Ltd (TCS) received a total compensation of ?25.8 crore during FY22.

Wipro’s Paris-based CEO has a pay of ?64.34 crore

HCL Tech CEO has a package of ?32.21 crore while Tech Mahindra CEO earns ?22 crore. 

Infosys justified the fat hike citing industry-leading growth in recent years.

Leadership Results

Under Parekh’s leadership, the company’s total shareholder return (TSR) was up 314%, the highest among peers.

Market capitalization increased during his tenure by about ?5,77,000 crore (about $69 billion).

In comparison, prior to Parekh’s appointment the company’s TSR was 30% as compared to the peers’ median TSR of 47%.

Revenue growth has also accelerated from ?70,522 crore (fiscal 2018) to ?1,21,641 crore (fiscal 2022).

Profits have increased from ?16,029 crore to ?22,110 crore.

Against Exorbitant Payouts

Meanwhile, co-founder and chairman Nandan Nilekani voluntarily backed out of receiving any remuneration for his services rendered.

A salary hike of this magnitude is unusual for a firm that stands on humble origins and its founders’ middle class backgrounds.

Its cofounder NR Narayana Murthy himself wrote in a column many years ago that giving huge salaries to only the CEOs makes no sense. 

Gap Grows Wider

He recommended a ratio of 20 to 25 between the lowest and highest salary.

This pay hike further widens the gap between the CEO and an average Infosys employee.

The present ratio of median remuneration of CEO to employees is 229 (excluding stock-based compensation) and 872 (including stock-based compensation).

IT CEO salaries have been on the rise but fresher salaries have worsened in the last decade despite a war for talent and zooming attrition.

Their pay stands at Rs 3.5-4 lakh annually, an 8-10 percent increase over a decade.

Average hikes at Indian IT services companies range between 4-8 percent.

Parekh’s Vision For Future

The hike announcement comes days after it reappointed Parekh as managing director and CEO for five more years, starting July 1 – a sign of trust in someone who turned the company around and restored stability.

Infosys continues to forecast success with a growth guidance of 13-15% 

Parekh said in an interview last month that the company pipeline is in good shape, there is “very good” demand and the firm has added 22,000 net new employees in the fourth quarter, all of which makes them confident for the future.

“Sector Bellwether”

JP Morgan described iIfosys as “the sector bellwether” and said that there is little risk in buying its stocks given its guidance track record.

The Infosys stock has risen by over 183% since Parekh took charge. 

The firm has more than doubled its revenues from digital and won large deals from companies such as Vanguard, Daimler and Rolls Royce.

Boost During Pandemic

The pandemic turned out to be a blessing in disguise since it made the company pivot to a delivery model where a majority of its employees would work from home.

Further, it benefited from clients migrating to the cloud and stepping up digital investments. 

Parekh, currently 58 years old, has been CEO and managing director of Infosys since January 2018, and took charge during what was then a turbulent time for the firm.