This was especially true for the CEOs who are also founders of companies, such as SD Shibulal of Infosys, whose total compensation fell about 30% to 91 lakh in 2011-12 compared with a year ago.
Human resources experts believe the pay for top executives of IT and business process outsourcing companies is likely to fall further this year because the gains from the rupee's steep depreciation cannot continue to compensate for a decline in market conditions.
"No one can afford to defer increments for staff while the CEO gets a raise. Austerity steps have to be flagged off first by the founding member or CEO," said Kunal Banerjie, CEO of Pune-based executive search firm Absolute HR International.
Software industry grouping Nasscom has projected that growth in fiscal year 2012-13 will slow considerably, to between 11% and 14%, with some suggesting that even this forecast is optimistic.
It is not the first time that senior executives at Infosys, which announced a salary freeze and a cut in variable pay in April, are seeing a decline in compensation. In 2008, a dismal year, board members had to forego 60% of their variable pay.
"The Infosys leadership has always led from the front and the reduction in our CEO compensation is a simple reflection of our variable pay structure, which is tightly linked to company performance," it said in a statement.
Other than Infosys, the top software services companies have not announced a salary freeze so far this year for their staff.
At Nucleus Software, CEO Vishnu Dusad saw his salary decline by nearly two-thirds to Rs 69.7 lakh in 2011-12, in what he described as a 'token cut' that does not impact the company too much. "But for others, it's an indication to all stakeholders that the market does not look very well and we have to buckle up," he said. Arvind Thakur of NIIT technologies opted for a 3% salary cut. Thakur said CEOs taking pay cuts this year even if the company is doing well "might spook investors".
The CEOs of better-performing software companies in the top tier - Tata Consultancy services and Cognizant - saw their rewards increase. Including the bonus, the total pay of TCS' N Chandrasekharan increased almost 50% to Rs 8 crore. Francesco D'Souza of Cognizant received a 5% increase in base salary to $566,500 and a 10% higher bonus.
SR Manjunath, head of human resources at Bangalore-based Netapp, said he does not expect a blanket dip in CEO salaries in the services sector; rather, it will be company- and individual-specific. "Companies that are into services have the salaries of CEOs linked to profitability. For product companies, there is no linkage and it is driven by a different set of performance objectives."
Edited By Cen Fox Post Team
