India: Salaries of IT CEOs climbed by 1,500% compared to only 50% for new hires, says report
A Business Today analysis has revealed that in the past 10 years, salary increases for new hires in the IT sector have been more muted than those for their CEOs. While the pay for CEOs has skyrocketed by around 1500 per cent, that of new hires has climbed by just a little over 45 per cent. In contrast to the CEO compensation, which has increased by a staggering 1,492.27 per cent over the last ten years, freshers' incomes have increased by just 46.94 per cent, according to a review of the average remuneration packages of CEOs of IT companies and freshers.
Additionally, according to the Business Today analysis, the median compensation for CEOs has increased by 1,449.02 per cent while the typical salary for freshmen has only increased by 40 per cent.
This discrepancy in the salaries between the CEOs and those at the bottom of the pyramid is not lost on industry veterans. T.V. Mohandas Pai, former CFO and Board Member at Infosys, told Business Today, “There has been no increase in compensation for freshers. They are being paid the same `3.5-4 lakh that the companies were paying 10-12 years ago. During this time, the salary for managers and seniors has gone up 4x, 5x, 7x.”
Vineet Nayar, former CEO of HCL Tech shared similar views. He told Business Today "This is an unfortunate depreciation and understanding of the roles that employees play in an organisation's growth. We have not understood the fundamentals of management. The fundamentals of management is that if companies were to spend even part of their marketing budget on enthusing, encouraging, and enabling your employees, you would see 10x returns."
Data from TeamLease Digital research shows how out of proportion the wages are at both levels when comparing the CEO's compensation to that of a new hire in the same organisation. This ratio is 1,973 at Infosys, 2,111 at Wipro, 1,020 at HCL Technologies, 644 at Tech Mahindra, and 619 at TCS.
Former NASSCOM president Kiran Karnik observed that this discrepancy may be caused by the fact that current graduates and new hires lack the necessary abilities.
Karnik told Business Today, “I now speak across the board in aggregate terms, they(freshers) don't have the skills that the company needs. Very often they don't have the domain skills, they have to be trained in that. And most often they don't have what we call soft skills, working in teams, communicating in any language."