A Comparative Analysis of Salary Trends in TCS, Infosys and Other Major IT Firms

While both Infosys and TCS occupy positions of prominence in the IT sector, their CEOs experienced divergent salary trends in FY23. As Infosys and TCS navigate the current uncertainties, the remuneration strategies they adopt will be crucial in retaining key leadership talent and fostering overall company growth.

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Introduction

This report sheds light on the annual salaries of the key management personnel at Tata Consultancy Services (TCS), India’s largest IT firm in terms of market share. With special attention to former CEO Rajesh Gopinathan, we explore his salary progression over the past three years, culminating in his resignation in March 2023. Furthermore, this report examines the remuneration of other notable management staff at TCS and contrasts these figures with salaries of CEOs in other major IT firms.

Rajesh Gopinathan’s Salary Trajectory

Rajesh Gopinathan’s remuneration in TCS saw a significant increase during his tenure. His total earning in FY23 was around Rs. 30 crore, reflecting a rise of nearly 13.2% YoY. Notably, over a span of three years, Gopinathan’s salary spiked by almost 118%.

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Salary Trends of CEOs: Salil Parekh and Rajesh Gopinathan

In FY23, Infosys’ CEO, Salil Parekh, experienced a 21% decrease in his total compensation, which fell to Rs. 56.45 crore from Rs. 71 crore in the previous year. This decline is reportedly due to Parekh exercising fewer restricted stock units (RSUs) during the year. His remuneration comprises base pay, retiral benefits, the value of stock incentives exercised, and any additional incentives or variable pay.

Conversely, Rajesh Gopinathan, the former CEO of TCS, saw his overall remuneration increase by 13.17% to Rs. 29.16 crore in FY23, his final year as the chief executive. This total remuneration includes a salary of Rs. 1.73 crore, other benefits amounting to Rs. 2.43 crore, and a commission exceeding Rs. 25 crore.

Comparison of CEO Salaries

Transition in TCS Leadership

In March 2023, Gopinathan chose to resign from his post as CEO and MD at TCS to pursue other interests. His successor, K. Krithivasan, a seasoned professional with over three decades of experience in the IT sector, took the reins from June 1, 2023.

Salary Analysis of Other Board Members of TCS

N G Subramaniam, who serves as the COO and executive director at TCS, received the highest hike among board members, with a 14.08% increase in FY23, bringing his total earnings to Rs. 23.60 crore. Subramaniam also holds the highest number of equity shares among the board members, with 1,97,760 equity shares as of March 31, 2023. In contrast, Gopinathan had 2,760 equity shares in TCS.

Comparative Overview of Remuneration for CEOs across Major IT Firms

Despite TCS’s prominence, Gopinathan’s remuneration lagged behind that of CEOs in other major IT firms. Infosys’s current CEO, Salil Parekh, took home Rs. 56.45 crore in FY23, including salary, bonus/incentives, and perquisites. Similarly, HCL Tech’s CEO C Vijayakumar earned approximately Rs. 130 crore in FY22. Wipro’s Thierry Delaporte and Tech Mahindra’s CP Gurnani received remuneration of Rs. 79.81 crore and Rs. 63.4 crore, respectively.

Employee Remuneration Trends at TCS

During FY23, TCS saw a median remuneration increase of 5.11% for employees. In India, the average annual increase was between 5-8%, accounting for promotions and event-based compensation revisions. For employees outside India, the wage increase ranged from 1.5 to 5.5%.

Corporate Governance Concern

While CEO compensation packages are typically reflective of a company’s performance and market standards, the recent salary hikes of CEOs at prominent IT companies have raised certain concerns from a corporate governance standpoint.

Conclusion

While CEOs undoubtedly play a pivotal role in steering the direction of a company, and their compensation often reflects this, it is crucial to maintain a balance. Salary hikes for CEOs should be justified, transparent, and in line with company performance, as per good corporate governance norms. Also, keeping the remuneration gap within a reasonable limit is crucial to maintain morale and ensure an equitable working environment.