IT CEOs’ pay set to dip as stock slump hits payouts
AI fears, West Asia tensions drag IT stocks, impacting performance-linked compensation
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Bengaluru: Compensation of Indian IT sector CEOs and other top executives is set to decline in the current financial year due to a sharp correction in IT firms’ share prices and tepid revenue growth.d
According to industry analysts, payouts for top executives in FY26 are likely to be affected as the Nifty IT index has been an underperformer since last year. Since the beginning of this year, fears surrounding artificial intelligence have further aggravated the fall in IT company shares. Hopes of a near-term recovery have also weakened due to the ongoing West Asia conflict.
“Compensation of CEOs and other top executives for FY26 is likely to be lower than last year as a significant portion of their payout is linked to share price performance,” Pareekh Jain, IT outsourcing advisor and Founder of Pareekh Consulting, told BizzBuzz. However, he added that the extent of the reduction will depend on the vesting policies of individual companies.
IT stocks have been among the worst performers over the past year, with the Nifty IT index becoming a drag on the broader benchmark indices. Over the last year, the share price of TCS has declined by nearly 30 per cent, while Infosys has fallen by around 24 per cent. HCLTech shares have dropped by about 12 per cent, while Wipro has declined by 28.45 per cent.
LTIMindtree’s share price has fallen by about 7 per cent, while Tech Mahindra has declined by nearly 10 per cent during the same period.
Among mid-tier firms, Coforge’s share price has dropped by about 24 per cent in the last year, while Persistent Systems has seen a decline of around 6 per cent.
Much of the fall has occurred in the last two months as AI-related concerns have unsettled technology companies globally.
IT sector CEOs have traditionally been among the highest-paid executives in India Inc, as a large portion of their compensation is linked to company performance and stock market movement. Given the strong financial performance and cash flows of Indian IT firms in the past, CEOs and other senior executives such as COOs, CFOs, CHROs and vertical heads have received compensation levels comparable to their global peers.
