The remuneration ratio between CEOs and median-level employees in India’s IT sector has widened to staggering levels, far exceeding global norms, where firms like Adobe and Cisco hover below 300x.

Experts attribute this to globally benchmarked CEO pay amid structurally low employee wages. While some argue that top leadership warrants such premiums due to performance pressure and talent scarcity at the top, younger job seekers are increasingly questioning internal pay equity, making transparency and fairness a rising differentiator in employer branding.

For FY25, the CEO-to-median employee pay ratios were 752 times at Infosys and 329.8 times at TCS, while in FY24, they stood at 1,702 times at Wipro, 1,383 times at Tech Mahindra, and 707 times at HCL Tech.

Sarbojit Mallick, Co-founder of Instahyre, observed that the overall S&P 500 average sits around 186x, and the US software & services sector averages about 84 times. This disparity is largely driven by Indian CEOs receiving globally benchmarked compensation packages, including stock options and performance bonuses, while median employee salaries remain relatively low. The CEO-employee pay gap in Indian IT firms is 3 to 10 times greater than their international counterparts.

“Global benchmarking, equity-linked compensation, a broad wage pyramid, and structural suppression of junior-level pay fuel the widening CEO-to-median pay gap. Without regulatory limits or internal equity standards, this divergence is likely to persist, particularly in export-heavy industries such as IT,” he said.

Sectors that bridge gaps

On the other hand, sectors like PSUs, oil/gas, power utilities, some FMCG, and cement companies have narrower CEO-to-median pay gaps by balancing CEO remuneration with structured employee pay and often wage growth. The ratio for sectors such as manufacturing is between 50:1 to 120:1, and retail & FMCG is between 80:1 to 200:1.

The high MRE (median remuneration of employee) ratios in large Indian IT companies reflect their global business nature and premium on strategic leadership in competitive markets, explained Aditya Narayan Mishra, MD & CEO of CIEL HR.

These organisations operate across multiple geographies with complex stakeholder relationships, requiring CEOs to navigate international markets, drive digital transformations and compete for talent globally. The ratio also reflects the pyramid structure typical in IT services, where large early-career workforces support smaller senior specialist teams. The number of people who can navigate these complex challenges is limited. The NRC Committee considers all these factors in deciding remuneration, including assessing CEO cultural fitment, with compensation ultimately driven by the fundamental economics of talent supply and demand.

“CEO compensation in large Indian IT firms is typically structured around long-term value creation rather than single-year performance metrics. Boards evaluate multiple factors, including strategic positioning for future growth, market share retention during challenging periods, and successful navigation of global economic uncertainties. This approach aligns with global practices where CEO remuneration considers multi-year performance and strategic execution.

Dearth of leadership talent

Neeti Sharma, CEO of TeamLease Digital, highlighted another driver: leadership talent scarcity. Globally, a major driver for the widening gap is the available talent pool for leadership hiring that meets the expectations of all stakeholders, from the CEO.

Rajesh Bharatiya, CEO and Founder of Peoplefy, added, “Market forces demand that companies show profit growth quarter-on-quarter. So, companies are willing to pay substantially differentiated compensation to hire or retain CEOs. Salaries are decided based on the skills and years of experience one brings to the table. Secondly, the supply of skills is higher at a lower level and keeps reducing as we go up the hierarchy,” he said.

There are also signs of change, with many new-age companies across tech and other sectors beginning to build flatter pay structures, with several actively working to reduce MRE ratios. In India, this shift is partly being driven by urban, tech-savvy job seekers who increasingly expect transparency and fairness. Social media platforms have amplified awareness, while viral “layoff + bonus” headlines have turned pay disparity into a flashpoint issue. Companies known for equitable pay practices are gaining a distinct edge in attracting young talent.

Published on June 17, 2025