Tech Mahindra’s Chief Executive Officer took home a remuneration of Rs 150.7 crore in 2017 financial year, a three-fold rise over the previous year, making it among the highest compensations earned by top executives of Indian technology services companies.
C P Gurnani’s compensation includes Rs 147.1 crore being the perquisite value from three million stock options issued in 2011 and 2014 that he exercised during the year. Salaries and commissions accounted for the remaining amount.
In FY16, Gurnani's compensation stood at Rs 45.3 crore, inclusive of stock option perquisite value, according to disclosures in the annual report for FY16.
Compensation for Vineet Nayyar, vice-chairman, went down from Rs 179.5 crore in FY16 to about Rs 20 crore, including the perquisite value of stock options.
While Gurnani’s total remuneration grew significantly, he received a 54 per cent increase in salary, excluding stock options from Rs 2.37 crore in FY16 to Rs 3.65 crore in FY17. In FY16, Gurnani’s remuneration had grown 5.6 per cent, excluding stock options.
The higher compensation comes at a time when Tech Mahindra
is struggling to grow its business amid changing technology shifts, increased pressure on traditional IT business and growing protectionism in their main markets.
In FY17, Tech Mahindra
saw profit drop by six per cent to Rs 2,813 crore, while revenues grew 10 per cent to Rs 29,141 crore. In the fourth quarter to March, its profits dropped by 31 per cent on project cancellations and restructuring of its Lightbridge Communications Corporation business. Operating margins, calculated at sales minus expenses, stood at 12 per cent, the lowest in two years and the weakest among top-five Indian IT services firms.
Gurnani's compensation is in contrast with rival Infosys
CEO Vishal Sikka’s earned Rs 43 crore, 67 per cent lower than his defined salary on account of lower bonus. In FY16, he earned Rs 49 crore.
Tata Sons Chairman N Chandrasekaran, who was the CEO of Tata Consultancy Services, till February 2017, took home little more than Rs 30 crore, including large share of commission as annual remuneration.
At Tech Mahindra, cumulative salaries of independent directors halved from Rs 8.8 crore in FY16 to Rs 4.4 crore in FY17. Total managerial remuneration dropped from Rs 240 crore to Rs 178 crore over the past year.
Salaries of key people at Indian IT companies
have been increased significantly at a time when the Indian IT industry has seen a single-digit growth first time in a decade due to global uncertainties and disruption in business models.
Revenues of top four Indian IT services firms grew between six per cent and eight per cent in FY17. While the industry lobby Nasscom
cautioned of a tough global market due to uncertainties, second largest player Infosys
revised its growth guidance thrice to settle at 7.4 per cent growth last year.