Why Salary Hikes of Infosys, Wipro Top Guns Are in Focus
Infosys and Wipro, two of the biggest IT outsourcers in the country, recently filed documents that highlight interesting trends about top management compensation.
Salaries of top management in both these companies have risen at a much faster rate than average employees. Infosys chief operating officer UB Pravin Rao and chief financial officer Rajiv Bansal got a hike of 200 per cent and 176 per cent respectively in the fiscal year ending 2015.
Mr Rao's remuneration, according to Infosys annual report, was Rs 6.08 crore in 2015; Mr Bansal's salary went up from Rs 1.71 crore in 2014 to Rs 4.72 crore in 2015. Srikantan Moorthy, executive vice-president and global head of HR at Infosys received a compensation of Rs 4.03 crore in 2015 as compared to Rs 1.31 crore in 2014.
The triple-digit hikes for the top management came in a year, when the average hike across Infosys was between 6 and 7 per cent. For the current year, Infosys announced an average salary hike of around 6.5 per cent.
At Wipro, India's third largest outsourcer, CEO T K Kurien took home a salary of $1.46 million (around Rs 9 crore) in FY15, which was 33 per cent higher than previous fiscal.
The fact that salaries of top bosses are growing a much faster pace than the average employee has not gone unnoticed by the IT industry.
The other trend is top-management salaries have gone up sharply in those companies that have underperformed over the last few years. Both Infosys and Wipro are considered to be laggards in the nearly $150 billion IT industry currency.
"IT Companies top honchos salaries zoom up even as performance stagnates. Examples #Infosys, #Wipro among others," tweeted fund manager Sandip Sabharwal.
Infosys, once considered as the IT bellwether, has underperformed its peers TCS, Cognizant and HCL Tech over the last few years. In 2014-15, its revenues (constant currency) grew just 5.6 per cent. Compare that to TCS, which posted a constant currency revenue growth of 17 per cent in the same year.
Like Infosys, Wipro too has been a laggard, significantly underperforming the broader industry over the last few quarters.
High Salaries to Retain Talent
Analysts say salaries have gone up not only for the top guns, but also for all deserving employees. Several employees in Infosys joined the Rs 1-crore per year club, according to regulatory filing submitted to the US Securities and Exchange Commission, the equivalent of India's market regulator Sebi.
Since taking over as Infosys CEO in August 2014, Vishal Sikka has announced back-to-back bonuses for all Infosys employees as well as out-of-turn promotions for many employees. Wipro, too, has said that top-performers will get double digit hikes.
The top management's salary is decided by a committee. According to Infosys latest annual report, the company will go all out to "retain the best talent" in top management.
Infosys says it will use a combination of stock options, restricted stock units and performance-based stocks to "align senior employee compensation with shareholder value.
