The share of companies where it would take over 100 years for a median employee to earn the equivalent of their top executive's annual salary rose to 65 per cent in FY24 from 61 per cent in FY19.
An increasing share of top executives now earns more in a year than their median employees would in 500 years, highlighting a growing wage gap in corporate India.
The proportion of such companies rose in the post-pandemic period -- to 16 per cent in the financial year 2023-2024 (FY24), up from 11 per cent in FY19, according to a Business Standard analysis of data from the tracker primeinfobase.com.
The analysis examined top executive pay for 110 firms within the Nifty 200 with available data since FY19, comparing it to the median pay of employees.
The share of companies where it would take over 100 years for a median employee to earn the equivalent of their top executive's annual salary rose to 65 per cent in FY24 from 61 per cent in FY19.
The median compensation for top executives has surged by 64 per cent since FY19, increasing from Rs 7.5 crore per annum to Rs 12.5 crore in FY24.
The analysis considered designations such as managing director (MD), chief executive officer (CEO), and chairperson, with the highest-paid individual among these roles being used for comparison.
This comes amid a broader workplace debate fuelled by comments from Infosys Co-founder N R Narayana Murthy, who advocated a 70-hour work week, and Larsen & Toubro Chairman and MD S N Subrahmanyan, who spoke of a 90-hour work week. Both reportedly framed their remarks as being in the context of 'nation-building'.
"High demand for leadership talent, especially in the post-Covid years, coupled with limited supply, has driven CEO/MD remuneration significantly upwards," said Pranav Haldea, managing director, PRIME Database.
Amit Tandon, founder and MD of Institutional Investor Advisory Services India, suggested the trend reflects a deeply entrenched belief among some executives -- particularly those who are also majority owners -- that the company's success rests heavily on their shoulders rather than being a team effort.
Tandon noted that these majority owners, or promoters, vote on their own pay packages.
He proposed giving minority shareholders greater influence by requiring the approval of a majority of minority shareholders for pay hikes. "I believe it will act as a check," he said.
Senior executive pay is also influenced by factors like stock options and retirement benefits, though significant differences exist across sectors.
In FY24, pay in the financial sector reached as high as Rs 241 crore (Rs 2.41 billion) at the upper end, while the top pay in the infrastructure sector was just over Rs 51 crore (Rs 510 million).
Meanwhile, median employee salaries across these sectors ranged between Rs 5 lakh (Rs 500,000) and Rs 13 lakh (Rs 1.3 million) per annum.
Two-thirds of companies had median employee salaries of Rs 10 lakh (Rs 1 million) or less per year, with one-fifth reporting median pay of Rs 5 lakh or lower. However, this lower bracket has seen steady improvement since FY19.
Among the companies with the widest pay gaps were Poonawalla Fincorp, where the top executive earned 2,679 times the median employee's pay, followed by Wipro (1,701 times) and Tech Mahindra (1,379 times).
Emails sent to these companies, as well as Infosys and Larsen & Toubro, did not receive an immediate response.
Feature Presentation: Rajesh Alva/Rediff.com
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