Astronomical corner-office pay packages have sparked debate worldwide, including in India. A Mint analysis of India’s largest listed companies reveals that median remuneration for top executives grew by 8.6% in FY24, marking a slowdown compared to FY23. . In several cases, the hikes aligned with the companies’ performance, but the salary gap with staff was stark in many companies, highlighting a larger issue.
The analysis covered 744 executive directors, including 700 senior leaders such as managing directors and chairpersons, across 491 of the Nifty 500 companies.
Corporate elite
India’s highest-paid CEOs hail from sectors like IT, banking and financial services, and auto, with three of the top earners also being company promoters.
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Over the last five years, the median pay for executive directors at Nifty 500 companies has surged: from ₹3.8 crore in FY19 to ₹5.7 crore in FY24. While the pandemic temporarily slowed pay growth, the rate is now rebounding towards pre-covid levels.
C-suite vs main street
The analysis revealed a trend where director pay hikes were somewhat aligned with company performance. A positive correlation was observed between increased profits of Nifty 500 companies and director remuneration, with pandemic-induced disruptions as an exception.
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But, here’s the catch. The stark compensation gap between directors and average employees shows a huge divide, with directors’ pay packages reaching over 1,000 times the median remuneration of employees in some cases. The disparity between the C-suite and employee pay rise is also of concern.
Crorepati club
The overall rising trend of executive pay increases in India also reflects in the growing club of those corporate directors who make more than ₹1 crore in a year. In FY24, 27% of the sample crossed the mark, compared with 26% in FY23. This represents a steady increase since FY18, when the share was at 24%, though it remained flat during the pandemic years.
Gender pay gap
Despite gradual progress, the gender pay gap remains pronounced in corporate boardrooms. Over the past five financial years, the number of women directors has risen, yet men continue to hold the majority of board positions, sustaining a significant disparity in compensation.
