TCS defies tech-sector inertia: Top execs see salary hikes in FY23

Rajesh Gopinathan, who stepped down from the role of CEO and MD of TCS, saw his total remuneration go up 13.17 per cent for 2022-23 (FY23)

At a time when salaries of the top management of India’s two largest information technology (IT) services have seen erosion, the leadership at Tata Consultancy Services (TCS) has seen just the opposite.

Rajesh Gopinathan, who stepped down from the role of chief executive officer (CEO) and managing director of TCS — India’s largest IT services firm — saw his total remuneration go up 13.17 per cent for 2022-23 (FY23). He received a total package of Rs 29.16 crore.

Gopinathan’s total compensation package comprised a salary of Rs 1.73 crore; benefits, perquisites, and allowances were Rs 2.43 crore; and commission Rs 25 crore. Likewise, N Ganapathy Subramaniam, chief operating officer of TCS, saw his total remuneration go up 14 per cent to Rs 20.68 crore for FY23.

TCS’ annual report does not furnish details on the remuneration of the new CEO K Krithivasan. The report just mentions his basic salary of Rs 10 lakh to Rs 16 lakh (maximum) monthly. The nomination and remuneration committee will be deciding other aspects of his compensation. However, the fall or rise in salaries of senior management also indicates the rising ratio to median remuneration increasing.

Gopinathan’s ratio to median remuneration was 427x. In the case of TCS, the percentage increase in the median remuneration of employees in the financial year was 5.11 per cent. By comparison, Infosys CEO Salil Parekh’s compensation for FY23 saw a decline of 21 per cent at Rs 56.45 crore — down from Rs 71 crore in the previous year. 

Parekh’s remuneration consists of base pay, retiral benefits, and a fixed salary. In addition, he also receives the value of stock incentives exercised during the period and any incentives or variable pay. The decrease appears to be due to Parekh exercising fewer restricted stock units (RSUs) during the year.

RSUs are a type of equity compensation offered to employees. Infosys provides RSUs through two plans. Under the 2015 plan, stocks are vested mainly based on time, while the 2019 plan’s benefit is based on performance. Performance indicators include total shareholder returns and the company’s operating metrics.

Wipro CEO Thierry Delaporte’s pay dropped marginally to $10 million in FY23, from $10.5 million in 2021-22. But the firm’s Chairman Rishad Premji saw his total compensation drop nearly 50 per cent since he had to forgo commission (variable pay) due to flagging profits.

The salary of former Cognizant CEO Brian Humphries declined 9 per cent to $17.9 million in calendar year 2023, from $19.6 million in the previous year, according to exchange filings. Cognizant, listed on the Nasdaq, follows the calendar year.

The salary cuts come at a time when the IT services industry is witnessing demand torpor, especially in discretionary spending.

“The cautionary environment has re-prioritised spending towards cost optimisation initiatives and also led to tighter scrutiny and a delayed approval cycle,” said analysts at Motilal Oswal.

Although the overall environment is uncertain, the top IT firms are sitting on one of their largest-ever contracts. TCS closed FY23 with a total contract value (TCV) of $34 billion; Infosys at $9.8 billion; and Wipro signed one of its highest TCVs for the year.