How executive pay is widening India’s corporate class divide. A story in charts

For the first time in recent years, the growth in directors’ remuneration was nearly in line with the overall profit growth of Indian corporates in FY25. Despite this performance alignment, the salary gap with average employees continued to widen.

Specifically, among the highest-paid C-suite executives, seven of the top 10 received raises that were steeper than those of their median employees. The analysis covered over 1,500 executive directors across 495 of the Nifty 500 companies.

Corner office czars

The ones at the helm of India’s information technology giants, banks and auto firms pocketed the biggest paycheques in FY25. Some of them are also the promoters of their companies.

The compensation here refers to that of an executive head in each company, who could be the chief executive, chairperson or managing director. With this, the pay gap between top executives and the average employee remains substantial.

Volatile growth

The median pay for executive directors soared from ₹2.8 crore in FY19 to ₹4.2 crore in FY25, delivering a near 7% annual growth. However, this six-year climb was far from steady. Initial headwinds and the pandemic’s drag led to a period of decline and stagnation.

After declining 5.5% in FY19 and another 3.5% during pandemic-hit FY21, compensation languished around ₹2.8-2.9 crore. This was followed by a significant jump of 21% in FY22.

While FY23 saw a minor setback, the momentum gained traction over the last two years, with consecutive double-digit gains of 14.1% in FY24 and 11.1% in FY25, driving the median pay to its current high.

“In India pay increases have been north of 9% for more than a decade (with the exception of covid year). This is an industry wide phenomenon and broadly applies across levels of management (with the top management being at slightly lower values than average),” said Nakshatra Bhatt, associate partner, executive and board advisory, Aon India.

“The rise in pay has two main drivers: a reversal of the Covid-induced pay freeze that lasted until FY23, and a structural shift due to new, higher-paying companies entering the Nifty 500 via multiple IPOs over the last three years,” Anandorup Ghosh, partner, Deloitte India.

Mirroring profit growth

For those in the highest corporate echelons, the substantial paycheques enjoyed by these executives for steering these firms are not mere salaries, but high-stakes incentive packages directly tethered to the performance they deliver.

A Mint analysis confirms this correlation: In FY22 and FY24, when Nifty 500 profits grew a robust 59% and 34%, directors’ pay also jumped 35.5% and 18.1%, respectively.

More recently, however, businesses have struggled with a consumption slowdown. This has prompted firms to implement cost optimization measures to protect their bottom lines, a factor that could have resulted in a modest single-digit growth for directors’ pay.

Eight-figure club

The rising executive pay trend is rapidly creating an unequal hierarchy and stratifying the workforce pyramid. At the apex, the ₹10 crore-plus club has nearly doubled with the share of executives rising from 3.1% in FY18 to 6.4% in FY25. Conversely, the largest segment—directors earning under ₹1 crore—has shrunk, declining from 76.1% to 71.8%.

The pandemic served as a temporary pause on this divergence. The base remained flat between FY19 and FY21, and growth at the top was minimal. However, after the pandemic, the gap quickly widened between FY23 and FY25, making the difference between the highest and lowest levels greater than ever.