Indian tech giants pay CEOs millions despite software turnover

There is a wild disparity between the salaries of the CEOs of Indian information technology companies and those of lower and middle management, the latter doing their business here at the headquarters of India’s most famous technology company, Infosys Technologies Ltd. in Bangalore in the photo.

Bloomberg | Bloomberg | Getty Images

CEOs of Indian IT companies are making big bucks as employee turnover rises.

IT specialty Wipro’s CEO Thierry Delaporte earned $10.5 million in the fiscal year ended March 31, 2022 infosys CEO Salil Parekh started painting $10.2 million this year under the terms of a new five-year contract, nearly doubling his salary from 2021.

This means that Delaporte and Parekh will earn more in about three hours. than the average employee for a full year, according to a ballpark estimate by the Senate of Information Technology Officers, a software industry association in India.

NITES President Harpreet Singh Saluja told CNBC that Indian CIOs are getting “obscenely high salaries” despite layoffs due to the pandemic.

“Those who avoided layoffs did so by announcing pay cuts,” Saluja said.

CEO of India’s largest software company Tata Consulting Services Rajesh Gopinathan received the lowest salary among his peers, while his salary was $3.2 million.

This was announced on Wednesday by Wipro. quarterly revenue grew by 17.9% compared to last year to $2.7 billion, while net profit decreased by 20.9% to $324.4 million.

Wipro also reported that 23.3% of employees quit for the three months ended June 30, a slight drop from the rate of 23.8% indicated for January-March quarter. During Wipro’s April earnings report, Delaporte said the company would “increase advance cycle frequency for 70% of our junior group colleagues now quarterly.”

Wipro did not respond to CNBC’s requests for comment.

Executive salary increase

Infosys, India’s second largest IT company, announced an annual dropout rate of 27.7%, according to the latest quarterly results. He also increased the CEO’s pay by 88%.

In its report, the company said that “total salaries for executive positions remained unchanged during fiscal year 2022. [is] primarily due to an increase in the surplus value of shares granted in previous years, but sold during the year.

The Infosys board said it aims to make Parekh’s salary comparable to that of his colleagues at other global software companies such as Accenture, Knowing as well as IBM. His salary is still lower than that of the leaders of these companies. Julie Sweet from Accenture earns over $23 million per year, Cognizant CEO Brian Humphreys receives over $19.6 million and Arvind Krishna from IBM in pockets over $17.5 million.

Infosys did not comment on the CNBC report, citing a quiet period ahead of its upcoming earnings report scheduled for July 24.

Mohandas Pai, who served on the board of directors of Infosys in its early days as an outsourcing company, said that “absurdly high” CEO salaries are indicative of the “Americanization” of the Indian software industry.

“These are offshore companies. These are not American companies. They grew up not because of a selfish attitude towards people, but because of human-centrism,” he said.

Pai said employee salaries have remained almost unchanged since 2009, while senior executive salaries have risen many times over. Paid employees in this sector tend to be those who write the code and whose time is paid directly to clients. As a rule, these are programmers and software engineers with up to five years of experience in the industry.

Growing demand for labor

Pai, formerly CFO of Infosys, said the pay of new hires in India has not kept pace with the growing demand for software professionals around the world.

Between 600,000 and 650,000 people were hired in India’s tech sector in 2021, Pai said, calling it the largest recruitment in the world. According to his estimates, between 1.4 and 1.5 million people will be hired. “over the next two years in India through IT services and start-ups.”

Pai attributed the rise in employee turnover to low wages in the industry, despite many software companies reporting record earnings during the pandemic. He estimated the company’s attrition costs at $5,000. per employee. According to Pai, Indian software companies can reduce employee turnover by 30-35% by paying fair wages.

“Globally, India is the only country with surplus human capital in technology. There is a huge shortage of qualified people in the United States, and an insufficient number of qualified people in Europe. the only country that serves global markets,” Pai said.