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Institutional EYE

Commentary on Corporate Governance Issues

CEO Pay: Sector Analysis (Information Technology)

This is the time of the year when boards are called upon to fix pay levels of its members for the coming financial year. This series on CEO pay, compiled by IiAS using data from comPAYre, IiAS’ cloud-based pay-versus-performance tool, is aimed at sensitizing boards on the remuneration trends across the market, as a basis for determining appropriate pay structures. This sixth piece in the series is focused on pay levels in IT companies.

The remuneration levels in the IT sector are moderate. While a fourth of the CEOs draw a remuneration of Rs.100 mn or more, the overall median pay in the sector is broadly in line with the market. Further, the ratio of CEO-pay to median employee pay, at 62x, is among the lowest across sectors. Unlike in the other sectors, professional CEOs in the industry draw a much higher remuneration than promoter CEOs. This can be partially attributed to the fact that many IT firms in India have chosen to invest in professional leadership. Given their vast geographic footprint, these firms need to benchmark their CEO salaries to global peers – something which has driven up salaries even at a time when profits have been suppressed. While attracting top talent will continue to remain critical, boards need to ensure that the CEO-pay to median employee salaries remain in a tight range.

Remuneration data for the IT Sector

Exhibit 1: Median pay in sector

The median remuneration in the sector is aligned with the S&P BSE 500. But, there is a wide disparity in the pay for CEOs and that of other EDs.

Exhibit 2 : CEO pay to median employee pay (x)

In IT companies, median salary levels are higher than the S&P BSE 500. Hence, CEO pay as a multiple of median employee pay is reasonable.

Exhibit 3 : Pay levels of 5 highest paid CEOs in sector (

25% of CEOs in the sector were paid more than Rs.100 mn in FY17.

Exhibit 4 : Fixed vs Variable Pay (%)

There is a higher mix of variable pay for CEOs in the IT sector on account of ESOPs.

Exhibit 5: Board Compensation as % of Profits

The aggregate board compensation, as a % of net profits, is marginally lower than the rest of the market.

Exhibit 6: CEO Pay Growth in sector (%)

The IT Sectors CEO pay levels have grown at a faster pace than profits over the last five years.

Exhibit 7: Number of Promoter vs Professional CEOs in the sector

The sector has a balanced representation from promoter family members and professional CEOs

Exhibit 8 : Median pay of Promoter vs Professional CEOs in the sector (

Surprisingly, the pay for professional CEOs in the sector is significantly higher than that of promoter CEOs

Exhibit 9: Gender Diversity

Like the rest of the market, women representation in the sector is poor – there are a total of 8 women executive directors (out of 62) in the sector


  • Data has been sourced from annual reports for the S&P BSE 500 companies and compiled using IiAS’ proprietary pay analytics platform, comPAYre

  • Data pertains to CY2016 or FY2016-17 (depending on financial year-end for respective companies)

  • PSUs have been excluded from the analysis

  • Fair value of stock options granted has been included while calculating overall pay

A modified version of this report was published by Mint on 30 April 2018. You can read the earlier reports by clicking the links below:

For full report, please click here

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