One thing CEOs cannot avoid is attention to their compensation packages. If you are in the C-suite of a listed company, your salary is inevitably going to be discussed and compared to your peers. There is danger on the upside (“Aren’t they getting too much?”) and on the downside (“Maybe they are not a great CEO.”)
But these salaries also showcase a company's values, their talent retention strategies, and dedication to fairness. Narayana Murthy, the founder of Infosys, was for example extremely against high salaries for the top management, saying that a CEO salary should not be more than 25X of the least paid employee. That rule, if we look at the top paid CEOs, has long been thrown out of the window.
CEO salaries are also potential red flags. For instance, a big YoY jump in CEO pay when the company’s revenue or net profit fell considerably in the same period raises corporate governance questions.
In this edition of Chart of the Week, we explore major market sectors to examine the highest CEO salaries from Trendlyne’s CEO salary dashboard, and compare them as a percentage of their companies' FY23 revenues.
We begin our analysis with the most highly-paid sector, software and services. Thierry Delaporte, the Managing Director & CEO of Wipro, leads with an annual remuneration of Rs 82.4 crore in FY23. This is a 3.3% rise from his remuneration in FY22 as the company’s revenue grew by 14% YoY in FY23 while the net profit declined by 7.2% YoY. His earnings account for 0.1% of the company’s FY23 revenue.
In the same sector, Sandeep Kalra, the Executive Director & CEO of Persistent Systems, earns an annual salary of Rs 61.7 crore in FY23, a substantial 31.6% rise from FY22. This is 0.7% of the company’s FY23 revenue of Rs 8,421.2 crore. The company did very well during the IT slowdown, posting an increase in net profit by 33.4% YoY in FY23.
Coming in third is Nitin Rakesh, the Managing Director & CEO of Mphasis, who receives an annual remuneration of Rs 59.2 crore in FY23, equivalent to 0.4% of the company’s FY23 revenue of Rs 13,960.1 crore.
Turning our attention to the banking and finance sector, Keki M Mistry, the Vice-Chairman & CEO of Housing Development Finance Corp, emerges as a prominent figure with an annual salary of Rs 20.8 crore in FY23. However, it's worth noting that HDFC is delisted due to the significant merger involving HDFC and HDFC Bank. As of August 2023, Keki Mistry is no longer CEO and is to be a ‘strategic advisor’ to all the financial ventures of Poonawalla Group. VP Nandakumar, the Managing Director & CEO of Manappuram Finance, receives an annual remuneration of Rs 18.6 crore in FY23, a 6% increase from FY22. This increase can be attributed to a 12.6% YoY growth in net profit in FY23. This is 0.3% of the company’s FY23 revenue of Rs 6,749.9 crore.
Shalabh Saxena, the Managing Director & CEO of Spandana Sphoorty Financial, comes in third, and draws an annual salary of Rs 15.7 crore in FY23, constituting 1.1% of the company’s FY23 revenue of Rs 1,477 crore. The CEO's salary rose to 15.6 crore from 15.7 lakh in FY22 due to the share based payment of Rs 15.1 crore made by the company in FY23.
In the automobiles and auto components sector, Jayadev Galla, the Chairman, MD & CEO of Amara Raja Batteries, commands an annual remuneration of Rs 52.6 crore, marking a 38.5% increase from FY22. The rise in remuneration can be credited to a surge in net profit of 35.5% YoY for the company in FY23. His earnings make up 0.5% of the company’s FY23 revenue of Rs 10,480.2 crore.
Meanwhile, Rajiv Bajaj, the Managing Director & CEO of Bajaj Auto, gets an annual salary of Rs 47.6 crore in FY23, reflecting a modest 4.3% increase from FY22. This remuneration constitutes 0.1% of the company’s revenue of Rs 37,642.9 crore in FY23.
Vivek Vikram Singh, Managing Director & Group CEO of Sona BLW Precision Forgings comes in third. He was paid Rs 12.5 crore as remuneration in FY23. His salary was reduced by 14.2% from FY22 due to a muted growth of 9% in the company’s net profit in FY23.
In the research & development heavy pharmaceutical and biotechnology sector, Kiran S Divi, the Whole-Time Director & CEO of the family-run Divi’s Laboratories, holds the highest annual remuneration of Rs 24.8 crore in FY23, despite experiencing a 34.2% reduction in pay from FY22. The company saw a fall in net profit of 38.4% YoY in FY23. His earnings represent 0.3% of the company’s revenue in FY23. Chava Satyanarayana, the Executive Director & CEO of Laurus Labs, follows with an annual salary of Rs 18.6 crore in FY23, followed by Umang Vohra, the Managing Director & Global CEO of Cipla, who earns Rs 17.5 crore.
Lastly, we look at the cost-sensitive metals and mining sector, where TV Narendran, the Managing Director & CEO of Tata Steel, commands an annual remuneration of Rs 18.7 crore in FY23, marking a 4.3% decrease from FY22. This fall can be associated with a fall in net profit of 78.2% YoY in FY23 .
Sunil Duggal, the Whole-Time Director & CEO of Vedanta, receives an annual salary of Rs 14.6 crore. Although the company’s net profit fell by 43.8% YoY in FY23 his compensation increased by 33.8% in the same period.
Jayant Acharya, Joint Managing Director & CEO of JSW Steel comes in third. He was compensated with Rs 10.7 crore as remunerations in FY23. His salary surged by 137.1% from FY22 levels although the company's net profit fell by 80% in FY23.
For more details on annual CEO salaries, you can check Trendlyne’s CEO Salary Dashboard.
