IT major Tech Mahindra offered a whopping Rs 150.7 crore as remuneration to CP Gurnani, its managing director and CEO, in the 2017 financial year. This is a three-fold increase from the previous year and makes Gurani one of highest paid executives in the IT sector in India, Business Standard reported.
This, even as Tech Mahindra made it to the news recently after an audio clip of an HR manager of the company curtly sacking an employee went viral.
In the 6.45-minute long audio clip, the Tech Mahindra employee is being asked to put in his papers as part of the company's "cost optimisation" plan.
"If you can put in your papers, we will be treating it as a normal exit with June 15 as last working day, if not, we will be sending you a termination letter," the HR executive says in the audio.
The HR executive sternly tells the employee that there is no "flexibility" in the decision. Further, Tech Mahindra suspended the appraisal cycle in February for senior employees, i.e. those with more than six years of experience, pending a management review.
The major part of Gurnani's fat compensation comes from the value of three million stock options that were offered to him, apart from salaries and commissions.
The Economic Times stated that according to a VCCircle report, Gurnani's remuneration is more than that of the entire boards of TCS, Infosys and Wipro, three of the country's top IT services firms.
According to the same report, N Chandrasekaran, current Tata Sons Chairman who was the CEO of TCS till February 2017, also saw an increase in his remuneration to Rs 30.15 crore. Vishal Sikka, CEO of Infosys, on the other hand received Rs 45.11 crore for the same financial period.
Romita Majumdar writes in Business Standard that "Salaries of key people at Indian IT companies have been increased significantly at a time when the Indian IT industry has seen a single-digit growth first time in a decade due to global uncertainties and disruption in business models."
Infosys founder NR Narayana Murthy has, on at least two different occasions this year, suggested that top level employees take pay cuts in order to protect the jobs of young people.
In April, he had termed the board-approved compensation hike for Chief Operating Officer UB Pravin Rao as "not proper" and said it will "erode the trust and faith of the employees in the management and the board".
Murthy said giving nearly 60-70% increase in compensation for a top level person (even including performance-based variable pay) when the compensation for most of the employees in the company was increased by just 6-8 per cent is "in my opinion, not proper".
In another interview to ET Now, he said, "In 2001, when the market actually shrank, the senior management decided ‘Let us make some sacrifice and ensure that we protect the jobs of youngsters’ and at that time we had offered jobs to 1500 engineers. Several companies were postponing the joining date. We said let's not do that, let us demonstrate our commitment to youngsters by the senior people taking some salary cuts based on the disposable income and reducing that kind of cut as we went down the hierarchy and let's welcome these 1500 engineers."
Jochelle Mendonca and Neha Alawadhi in a report for The Economic Times had reported that industry analysts felt that IT firms were focusing on hiring freshers instead of maintaining a big senior management.
"Indian IT has a problem because their pyramid is more bulky than it was in the middle. You don’t want the freshers to leave because you have invested in their training but if you can create a situation in which more senior employees start looking to leave, then it works in your favour,” an executive told the publication.
After the audio clip was leaked and generated a significant amount of furore, too, Tech Mahindra and Mahindra Group Chairman, Anand Mahindra, offered an apology on Twitter on Friday.
Tech Mahindra Vice-chairman Vineet Nayyar also responded to the incident saying, “We have become aware of the incident involving a conversation between an employee and a company HR representative. We deeply regret the manner in which the discussion took place and have taken necessary corrective steps to ensure that this does not happen again in future."
Amid reports of wide scale layoffs in the IT industry in the country for several months now, most IT companies have either remained shut or have denied the issue altogether.