Infosys CEO Salil Parekh's salary reduced by 21% in FY23
Infosys CEO Salil Parekh's annual remuneration dropped by 21% as he chose to exercise fewer restricted stock units.
Infosys Chief Executive Officer Salil Parekh’s annual remuneration dropped 21 percent in financial year 2022-2023. The annual salary of the head of the Bengaluru-based IT giant declined to Rs 56.44 crore FY 23 as against Rs 71 crore in the previous financial year, according to the company’s annual report.
There was no change in his employment terms, but the drop in remuneration was a result of Parekh chosing to exercise fewer restricted stock units over the past year, according to the company.
CEOs of major public corporations usually only earn a small portion of their annual remuneration through fixed salaries, with the majority of their remuneration being in the form of various equity compensation. These include stock options, restricted stock units (RSUs), employee stock purchase plans (ESPPs), performance shares, stock appreciation rights (SARs), phantom stock, employee stock ownership plans (ESOPs), stock bonuses, and stock purchase agreements.
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Restricted stock units (RSUs) represent a promise to receive a certain number of shares of the company in the future. These shares are subject to vesting, and currently, Infosys offers RSUs that can be vested with time or with performance metrics.
Parekh’s salary includes fixed pay, variable pay, retiral benefits, and stock benefits. Last year, out of his Rs 71 crore compensation, over Rs 52 crore was from exercised stock options alone. In comparison to this year, Parekh has exercised Rs 30 crore worth of stock options, a 42 percent decrease. Parekh’s base pay for the year stood at Rs 6.67 crore with an additional Rs 18.73 crore variable pay, along with Rs 45 lakh retiral benefits. His base pay increased by just under Rs 1 crore, his variable pay shot up by Rs 6 crore over the previous year.
Despite the pay ‘cut’, Parekh’s remuneration stood at 627 times that of the median salary of Infosys employees which only stood at Rs 9 lakh a year. Interestingly, Parekh was not the highest-paid individual in Infosys in FY23 and that distinction went to company president Mohit Joshi who will be leaving to join as Tech Mahindra CEO within the week. Joshi’s compensation for the year stood at Rs 57.32 crore.
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