Compensation gap between CEO & median employee widens in India Inc
A recent study of latest Annual Reports of 35 listed companies who are amongst the top ones in their respective sectors or by market cap by Economics times, reveal that the gap between the chief executive officer and median employee compensation in India Inc. has widened from the pre-pandemic years.
The ratio of remuneration of CEOs to median remuneration of all employees in companies like Hindustan Unilever, Indian Hotels Co, EIH Ltd, Infosys, Larsen & Toubro, Sun Pharma, Titan, Tata Steel, JSW Steel, Wipro, Dr Reddy’s Laboratories, Dabur, Voltas and Mphasis, amongst others, have increased in 2023-24 compared to 2019-20, as per their latest annual reports.
As per some CEOs, HR heads and compensation experts, the widening gap is due to higher proportion of variable pay and bonus, employee stock ownership plan (ESOP) linked earnings for top bosses, while median salary hikes for other employees have been moderate, mostly in single to low double digits. Also, at entry and junior levels, there has been no proportionate compensation increase in last 4-5 years.
As per provisions of the Companies Act, 2013, every listed company shall disclose in the Board’s report, the ratio of the remuneration of each director to the median employee’s remuneration.
