Massive Pay Gap: CEO Salaries Up 160% While Freshers Get Only 4% in 5 Years – Report
Massive Pay Gap Widens in IT Sector | Over the past five years, the compensation for top executives in India’s IT sector has risen sharply, while entry-level salaries have shown minimal growth. Data from Moneycontrol reveals that the annual pay of CEOs at leading IT firms has increased by more than 160%, contrasting with just a 4% hike in salaries for freshers. In FY24, the median salary for CEOs at companies like TCS, Infosys, HCLTech, Wipro, and Tech Mahindra reached approximately ₹84 crore per year.
Meanwhile, fresh graduates entering the workforce saw their annual packages move from ₹3.6 lakh to ₹4 lakh over the same period. As per the report, among these firms, Wipro stood out with the highest CEO-to-fresher salary ratio at 1,702:1, compared to TCS’s ratio of 192:1. The widening pay gap comes amid a slowdown in India’s economic growth, with GDP expanding by only 5.4% during the second quarter of FY25.
What’s Inside
The massive pay gap in the IT sector?
Despite being a significant contributor to the economy, the IT industry reported a net reduction of 64,000 employees in FY24, marking the first time in two decades that overall headcount decreased. Companies are focusing on cost-cutting measures, including optimizing workforce utilization and reallocating benched employees, as they face weakening demand and global economic challenges.
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A broader slowdown in wage growth has been observed across sectors. According to a report from FICCI and Quess (first underlined by Indian Express), wages in the engineering, manufacturing, process, and infrastructure (EMPI) sectors recorded the slowest growth, with a compounded annual increase of just 0.8% between 2019 and 2023.
Implications for the IT Sector
As one of the largest employers in the private sector, the IT industry plays a crucial role in shaping consumption patterns and driving investment in India. However, the sharp divergence in pay growth between executives and freshers highlights a structural issue within the industry. While corporate profits and revenues have surged, these gains have not translated into proportional increases in wages for the broader workforce. This disparity reflects the sector’s ongoing challenges, including balancing cost efficiency with fair compensation practices, especially in a period of uncertain economic conditions and fluctuating demand for IT services.
