The Great Pay Divide: Why CEO Salaries Are Skyrocketing While Worker Wages Stagnate

Ever wonder what it’s like to have a pay-cheque so big it could fund a small country? Well, CEOs know all about it!

In a world where worker wages are barely budging, CEO pay-cheques are skyrocketing to almost unreal levels. So, what’s driving this massive pay gap, and why are those at the top seeing such huge gains while the rest of the workforce struggles to get by?

Let’s dive into the world of corporate pay-cheques to find out.

Recent research by Oxfam France shows that chief executives of France's top 40 listed companies, or CAC 40, earned an average of 130 times more than their employees in 2022.

And here’s the kicker: the gap is only getting bigger. From 2019 to 2022, worker salaries in these companies rose by 9%, while CEO pay jumped by a whopping 27%.

How does that even happen?

Coming to India, the story is just as stark. For example, let’s look at India’s IT sector.

Cognizant, a leading IT company, recently faced public outrage over its starting salary offer of 2.5 lakh rupees per annum for fresh graduates – a figure that’s barely changed since 2002! .

Meanwhile, Cognizant’s CEO, Ravi Kumar Singisetti, took home an eye-popping 22.56 million dollars last year. That’s about 186 crore rupees and 556 times the median salary at Cognizant!

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Other companies aren’t far behind. Former Wipro CEO Thierry Delaporte’s compensation last year was 1,702 times the median salary of 9.8 lakh rupees in the 2023-24 fiscal year.

Over at Accenture, CEO Julie Sweet’s pay was 633 times the median employee salary for the 2023 fiscal year. Infosys CEO Salil Parekh's compensation is nearly 700 times the median employee salary and significantly more when compared to the lowest-level employee, according to *The Economic Times*, a sharp increase since 2019.

Much of this growth in CEO pay comes from stock awards – according to *The Economic Times*, in 2023, about 70% of CEO compensation came from these awards, which have been climbing steadily.

Now contrast this with what’s happening at entry-level jobs in the IT sector. With slower growth in Western markets, companies like TCS, Infosys, and Wipro have reduced headcount by nearly 64,000 people in the past year.

In fact, only 60,000 net jobs were added across the industry in the last financial year, a sharp drop from the 290,000 added in 2022-23. Sangeeta Gupta, Chief Strategy Officer at Nasscom, shared insights with AFP, stating, "If your revenue is growing only two to three percent, you don’t have the space to add headcount."

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The slowdown is even hitting India's elite engineering colleges. Rajib Maity, career development head at IIT Kharagpur, confirmed to AFP that “placements are less this year.” One IIT student shared that job offers aren’t being handed out as before, forcing students to adjust their salary expectations.

So, if these companies are struggling, why is CEO pay still on the rise? That’s a question which largely remains unanswered.

The surge in income inequality within companies isn't confined to the IT sector – it’s a problem that’s becoming widespread.

Where does this leave us? Will CEO pay-cheques keep soaring as worker wages stagnate? And what does this widening gap mean for future job seekers and employees? The current trends don’t paint a hopeful picture.