T V Mohandas Pai, who was a former director and in charge of human resources at Infosys, has brought up the question of wage disparity in India Inc and he hasn’t minced words. In order to buttress his point, Pai, now the chairman of Aarin Capital, has quoted figures from his previous company where he also served as the chief financial officer.
In the example he furnished, Pai said that back in 2011 – the year when he quit Infosys – the company paid freshers Rs 3.25 lakh a year. In 2024, a good 14 years later, freshers are handed out anywhere between Rs 3.5 lakh and Rs 3.75 lakh. It works out to 15% in 13 years. Mohandas Pai not only asked tersely, “How is it justified?”, but also rounded up his argument by asking “What was the CEO paid in 2011? What is the CEO paid now? It has to be fair.”
Compare with IF CEO’s salary growth
Pai highlighted the contrast in yawning gap in pace of growth of the compensation packages between the lower and highest rungs. “Look at an IT CEO’s salary five years ago, and look at it now—it has gone up 50-60%. Board compensation has increased by 20%, 30%, even 40%. But for the bottom 20%, wages have only risen by 20-25%,” Mohandas Pai told the media in a recent interview. He also added, “The percentage of wages to value-added has come down because of automation, and they are not paying more.”
While Pai’s experience with Infosys can’t be questioned, significantly, his question has also mirrored the findings of a broader study by V Anantha Nageswaran, the chief economic advisor. This study found that in March 2024 corporate profits touched a 15-year high, but unfortunately employee wages have hardly kept pace with this growth in profits.
Contract employees got an even more raw deal
While Pai highlighted freshers, contract employees got an even more raw deal. According to reports, a Quest study found that their wages went up by 1-2% in the past 5 years. They are almost condemned to hover near the statutory minimum wages. “There is a great degree of exploitation of the bottom 50%, and India Inc has to really pay them better,” Pai remarked.
“CEOs’ salaries have gone up multiple fold… People are in pain because costs have gone up, and wages haven’t kept up, Pai said. He also felt that compensation should be linked to performance of an employee and even said that minimum wages should be raised in the service sector of the country.
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