Take a middle path on CEO payout & job security of employees

Compensation of Indian IT companies’ CEOs has always been a point of discussion in the corporate world. Despite revenue growth slowing down to low single digit in FY26, compensation of top executives remained mostly unaffected. For instance, Infosys Chief Executive Officer and Managing Director Salil Parekh took home Rs 82.6 crore during FY26. Wipro CEO and Managing Director Srinivas Pallia followed with Rs 49.6 crore of total compensation during the last financial year. TCS CEO and Managing Director, K Krithivasan received Rs 28 crore of remunerationfor FY26.

Interestingly, TCS CEO usually draws the lowest among top four Indian IT firms despite being the biggest IT services company in India. These compensations are also very high as compared to median salary of their companies. Debate over high compensation to top executives is not new. In India, top CEOs of many other sectors also draw astronomical figures. Now, there are two schools of thoughts on these issues. First school of thought support high compensation to top executives.

According to them, Indian businesses are highly integrated with global economy. To attract and retain top notch talent, organisations have to pay the industry-best. This is more suitable for global businesses like IT services, pharma, and other export-oriented sectors where most of the revenue come from global clients. Supporters also argue that given the risks taken by top executives in navigating a complex global business environment, the remuneration is justified. Additionally, as a significant portion of the compensation is linked to stock price of the company, they argue that such payout is very much performance-driven.

Another school of thought is opposed to astronomical figures given to top executives. Proponents argue that in a country like India, such very high compensation gives a wrong message. Because majority of the employees draw very low salary as compared to top executives. Moreover, they are of the opinion that while companies are not performing well as in case of top-tier Indian IT companies, such huge payout shows the insensitivity of their boards towards performance.

When remuneration doesn’t get affected despite bad performance of companies, shareholders are not a happy lot. In case of Indian IT companies, current AI wave has severely eroded market cap of many IT firms. However, there is hardly any reflection of such market movement on top executives’ salaries.

Moreover, since last two years, global technology companies coupled with some Indian IT firms had undertaken mass layoffs. Several thousand employees had lost their jobs with many at crossroads. Despite such a scenario, high compensation to top executives shows the absurdity of current capitalist system, they argue. Now, both arguments are logical for an individual depending upon which side of the scale he or she stands. A normal employee may not like such high compensation given to his/her CEO; while a top executive may justify the payout. There is no right or wrong in such arguments. And hardly there is any value judgement to be drawn from such a trend. No wonder, world’s largest economy- US has also seen such debates over payout to top executives and promoters of tech firms, while thousands of employees lost their jobs due to the current AI wave across sectors.

Notably, in any market-driven economy, corporate profits and shareholders’ return mostly determine the executive compensation over any socialistic argument. That’s how the world is. But if such high payout continues to be the new normal while companies retrench employees; then at some point of time, masses will notice and may create not-so-pleasant situations for corporates. So, it’s better, boards take note and take a middle path on compensation of top executives and job security of employees.