Business

How Bad is the Employee-Boss Wage Gap in Nifty 50 Companies?

In a majority of the companies, the top-paid executive earned more than 100 times the median remuneration of their employees.

New Delhi: The top-paid executive of Hero Motocorp, Infosys, Tech Mahindra, Bajaj Auto and Hindalco Industries earned more than 500 times the median salary of their company’s permanent employees in FY’20, according to a new compilation and analysis of corporate filings.

Among Nifty 50 companies, Hero Motocorp reports the highest pay ratio (top executive remuneration to median remuneration) at 752 – CEO Pawan Munjal earned Rs 84.59 crore in FY’20, while the median remuneration of the firm’s employees during the fiscal was Rs 11.25 lakh.

The lowest pay ratio, on the other hand, is seen at Maruti Suzuki, at 1:39.

The table below shows the pay ratio (in descending order) of the top-paid Key Managerial Personnel (KMP) to median remuneration for 42 private companies in the Nifty 50 list for the financial year ending March 31, 2020. The total remuneration paid to the top KMP is also included.

‘Median remuneration’ essentially means that half the employees in the organisation make less than that amount, while the other half makes more.


This data comes as a result of a Securities and Exchange Board of India rule that requires publicly-traded companies to disclose the remuneration to their top management vis-à-vis other employees. The disclosures are mandated under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The list does not include the government-owned companies in the Nifty 50 as Section 197 of the Companies Act does not apply to them. 

According to economists Reetika Khera and Meghna Yadav, who compiled and analysed the data for FY’20, the percentage increase in remuneration for the top-paid executive was higher than the percentage increase in median employee remuneration for 15 companies over a period of time.

“If one compares the percentage increase in the remuneration of the top paid executive, with the percentage increase in median remuneration, we find that out of 37 companies where data was available, the increase in median remuneration was lower for 15 companies and higher for 21 companies,” Khera and Yadav note.

“There is one woman – Vibha Padalkar – in this list. There do not appear to be any Dalits or STs, and there is (at least) one Muslim.”

The duo also notes that this data is not available in the annual report for Reliance Industries.

RIL’s Annual Report (p. 219) states: “Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. Having regard to the provisions of the second proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection on all working days, during business hours, at the Registered Office of the Company. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.”