Within the industry, Salil Parekh’s ‘Great Raise’ has been met with mixed reaction. While a section of the industry leaders believe it to be absurd, some felt it could be justifiable at a time when companies are trying to retain employees in the middle of the ‘Great Resignation’ — a phrase coined during the Covid-19 pandemic when thousands quit the Indian workforce in search of better packages and healthier environment.
An almost livid industry leader quipped: “88% hike! It is preposterous and sets a bad precedent at a time when the country is still recovering from the effects of the pandemic.”
Another senior IT leader called the salary hike “ridiculous” and said the move is completely against the cornerstone on which Infosys was built on.
“Had the company been based out of the US, such a hike may have had some justification, but Parekh sits out of Mumbai, India. It goes completely against the cornerstone on which Infosys was built which was fairness, equality and equal opportunity. This could not have come at a worse time when the country in recovering from the pandemic. Practising the US capitalist culture in a developing country like India looks bad on the CEO, the board and the company’s image as well,” the leader said.
A former Human Resource professional who has worked in a few top Indian IT firms and is now based in Australia compared the salaries of CEOs of other Indian companies to make a point.
“Compare the annual salaries of CEOs of Indian companies. In TCS, it is around Rs 25.8 crore, HCL around Rs 33 crore. Mr Parekh’s salary of Rs 79.75 crore is a huge leap even according to industry standards. Infosys is seeing some stability during Mr Parekh’s tenure and this could have been a way to keep him from leaving. The board may have had no other choice,” the HR professional said.
The tech industry did not suffer as much as other sectors during the pandemic with employees embracing the remote working concept and the work cycle continuing undisturbed.
There is, however, a silver lining in this. The Indian bellwether company has also planned big bonuses, salary hikes and promotions to “deserving employees”. While this may seem fair, one cannot shake off the fact that it could have been a move to avert the high attrition levels that Infosys has seen.
According to reports, attrition in the company was around 22.7% with the company struggling to retain talent in the machine learning, cloud computing, artificial intelligence and data science verticals.
It is learnt that Infosys has plans to offer an average 12-14% raise in salaries to its employees in India and also incentivise the senior management with retainer bonuses and salary hikes of up to 20%. Even Microsoft recently announced that it was doubling the monies kept aside for employee salaries.
“The talent pool has just got bigger with people working remotely out of their homes. There is a high demand for experienced engineers, product managers and people qualified for leadership roles globally and in India as well. Attrition has been high, but companies have been trying hard to woo them and keep them onboard. So may be the employees also see good hikes, let’s see,” said a Bengaluru IT professional who did not want to be named.
In its annual report, Infosys put out a rather long explanation on its decision to increase its CEO’s compensation. The report said it was linked to his performance. The company stated that under Parekh’s leadership it has seen good growth and the hike was a reward for his contribution.
Parekh’s hike comes a few days after he was re-appointed as Infosys’ Managing Director and Chief Executive Officer for the period of five years, from July 1, 2022 to March 31, 2027. Parekh was first appointed as the CEO and Managing Director of Infosys in January 2018.
The unusually long justification for Parekh’s hike in the report read:
“Under Salil’s leadership, the Company’s Total Shareholder Return (TSR) was an impressive 314 per cent, the highest among peers. The revenue growth of the Company under Salil’s leadership has accelerated and grown from Rs 70,522 crore (fiscal 2018) to Rs 1,21,641 crore (fiscal 2022), a CAGR of 15 per cent (prior four years CAGR 9 per cent) and the profits have also increased from Rs 16,029 crore to Rs 22,110 crore.”
Infosys had earlier this year hit the headlines for enforcing non-compete clauses on employees who have resigned. Former Infosys employees have been banned from working in TCS, IBM, Accenture, Wipro and Cognizant, leading to several employees complaining to NITES, a Maharashtra-based IT employees’ union. NITES then shot off a letter to the Labour Commissioner the and Union Ministry of Labour seeking a resolution to this “unfair” clause.