Former TCS CEO Rajesh Gopinathan earned Rs 29.16 cr in FY23, up by over 13% YoY

Former Tata Consultancy Services (TCS) CEO and MD Rajesh Gopinathan drew Rs 29.16 crore in remuneration in FY23, an over 13.17 percent YoY increase from Rs 25.75 crore he received in FY22, according to the Mumbai-headquartered IT services company’s annual report.

Gopinathan’s compensation included his basic salary; benefits, perquisites and allowances; and commission. He received a commission of Rs 25 crore in FY23. The compensation does not include employee stock purchase scheme (ESPS). He holds around 2,760 stocks in the company.

K Krithivasan took over the top job from Gopinathan from June 1, 2023 onwards, although his compensation package was not disclosed. He will be paid a basic salary of Rs 10 lakh per month, which can go up to a maximum of Rs 16 lakh per month. Krithivasan, as of FY23, holds around 11,232 company shares. However, like in the case of Gopinathan, the commission is subject to the company’s performance and will make up a bulk of his remuneration.

The company said that the commission is calculated with reference to the net profit earned, subject to the ceilings set. The specific amount to be paid out to the executive, however, will be up to the Board or the Nomination and Remuneration Committee and paid out annually.

Gopinathan made over 427 times the median remuneration of the company’s employees. According to the report, TCS employees in FY23 saw a median remuneration increase of 5.11 percent. When calculated, TCS' median employee pay for FY23 stood at Rs. 6.82 lakh per annum. The company has around 6,14,795 permanent employees.

Chief Operating Officer NG Subramaniam earned Rs 23.6 crore in FY23, of which Rs 19.5 crore was the commission, and the rest being his salary and benefits. He saw a 14.08 percent increase in remuneration, and made 345.68 times the median remuneration. He holds 1,97,760 shares in the company.

There is a wide disparity between the salaries of CEOs in TCS’ peers such as Infosys and Wipro. For the year in question, Wipro CEO Thierry Delaporte drew a salary of Rs 82.4 crore in FY23 ($10 million), which was a fall of 5 percent from the preceding year.

Infosys CEO Salil Parekh, on the other hand, earned Rs 56.44 crore in FY23, which was a fall from Rs 71 crore in FY22. However, the fall was primarily on account of exercising restricted stock units (RSUs) during the year. Parekh made 627 times the median remuneration, as compared to Gopinathan’s 427.

Focus on ‘AI transition’

In his letter to the shareholders, Chairman N Chandrasekaran highlighted that amid rapid evolution of digital technologies, artificial intelligence (AI) transition has become the company’s “central focus.”

“The impact of AI and Machine learning is going to be profound. There is a transition already underway from predictive AI to generative AI. Majority of the businesses are still adopting predictive AI and are on the journey of capturing large volume of data, harnessing the power of cloud and IoT. There are varying levels of adoption in companies across sectors,” he said.

“Leveraging generative AI would further require technology innovation and investments,” he added.

The company will also focus on building talent for the future. The energy, supply chain, and AI transitions will require companies to reskill/upskill existing talent base, hire and integrate new talent, and invest in research, according to Chandrasekaran. “Our technology strengths make us well-placed to respond to the global demand and scale up our talent base,” he said.

He also noted the ongoing energy transition as sustainable growth takes centre stage for businesses; and a supply chain transition resulting from geo-political situation is underway as companies rebalance their supply chains for resilience and efficiency.

Meanwhile, Krithivasan in his letter said, “As part of their continuing digital transformation journey, we see sustained focus on cloud adoption, data architecture, customer experience and business model transformation.”

“On top of these current focus areas, technologies like 5G, IoT, generative AI, virtual reality / metaverse, digital twin and others are also gaining attention and are likely to attract investments in the short to medium term,” he added.

Gopinathan’s last letter

Gopinathan’s last letter to the company’s shareholders as the TCS CEO and MD mentioned that having full services capability as a company has helped TCS’ enable clients to thrive in good times and bad.

“During the up-cycle, we help clients accelerate and expand their technology-led innovation to differentiate themselves and drive growth. On the down cycle, we help them adapt, using technology to drive the efficiency, agility and resilience needed to cope with a faltering economy, and prepare for better times ahead,” he said.

Gopinathan termed his tenure as an “absolute privilege and unparalleled learning experience”, and said that he is confidence the company’s best years are ahead of it as enterprises rely on technology ever more.