Almost half of India Inc’s top bosses earn more than 100 times more than their employees | Today’s news

Payrolls at India Inc’s branch offices are getting larger and more detached from what the wider workforce earns. As companies grow in scale and complexity, competition for experienced leaders and a shift toward performance-based compensation are pushing executive compensation higher, experts said.

But the widening gap between boardroom pay and employee wage growth raises questions about how company profits are distributed.

An analysis by Mint found that nearly 45% of executives at 232 BSE 500 companies earned more than 100 times their company’s median employee compensation in FY26, up from nearly 40% in FY20. Most earned at least 80 times more median employee compensation since FY24. The study is based on comparable data from annual reports between FY20 and FY26.

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The concentration of wealth at the top is also reflected in the changing pay pyramid. Almost 7%. boardroom members earned ₹10 million or more in FY26, more than double the roughly 3% seen in FY20. Meanwhile, the bottom line—directors earn under ₹1 billion, down to nearly 70% from 76% six years ago.

Talent premium

The rise in executive pay reflects a combination of strong corporate growth, increasing business complexity and restraint supply of leaders capable of running large organizations, said Anandorup Ghose, CEO of upGrad Next.

As a result of this expansion, BSE 500 companies have seen their aggregate returns more than triple the index’s growth over the past decade, data from the Center for Monitoring the Indian Economy shows. As businesses have expanded their global presence and integrated digital and traditional operations, the demands on their leadership have also increased, Ghose added.

“Companies are also competing for a relatively small pool of proven CEOs,” said Mala Chawla, managing director of Stanton Chase India and Singapore, adding that the supply-demand mismatch has further pushed up executive compensation.

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Corporate leaders also now bear increasing responsibility for digital transformation, AI-driven restructuring, cyber security, compliance and environmental, social and governance (ESG) risks, warranting higher compensation, noted Madan Mohan Kunnathele, independent board advisor. Global benchmarking practices have also pushed wage levels higher compared to historical domestic standards, he added.

However, the shift is not only towards higher fixed salaries. Executive pay is increasingly moving toward variable pay tied to annual performance and long-term incentives, Ghose said. Until around 2010, fixed pay accounted for 70-80% of compensation for Indian CXOs with limited long-term incentives. Today, variable pay makes up at least 60% of professional CEO compensation at larger companies, split almost equally between annual and long-term incentives, he added.

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The contrast is sharper with the US, where long-term incentives accounted for more than 70% of CEO pay in 2025, according to a Willis Towers Watson analysis of more than 500 companies in Japan, France, Germany, the UK and the US.

A widening chasm

The growing trend toward performance-based pay has widened the gap between executive pay and regular employee wages. An analysis by Mint shows that executive pay has largely tracked corporate profits over the past three years, even outpacing profit growth in FY26.

Directors’ remuneration rose 38% year-on-year, against a 22% rise in total net profit among BSE 500 companies. In contrast, employee remuneration, excluding executive remuneration, rose only 1% last fiscal.

Chawla attributed the divergence to the mere cost of across-the-board wage increases. Even modest increases in thousands of employees can substantially increase companies’ costs and prompt them to prioritize higher compensation for a smaller pool of critical leadership talent, she said.

Automation and productivity gains have also reduced the need for across-the-board wage increases, while variable pay structures allow executives’ earnings to outpace normal salary increases, Kunnathele noted. But the widening gap could affect employee morale and perceptions of fairness, particularly as the wider workforce sees limited wage growth despite rising company profitability, Kunnathele warned.

Pay differentials also vary by ownership structure. Family businesses tend to have greater differences between senior and middle management, sometimes extending to the wider workforce. These are generally less pronounced in professionally managed companies, especially multinational ones, he added.

Under a closer scrutiny

Rising executive pay also attracts closer shareholder scrutiny. Proxy advisory firms and institutional investors are increasingly questioning pay decisions, pushing nominating and remuneration committees (NRCs) and boards to pay more attention to the amount and structure of payouts, said upGrad Next’s Ghose. In particular, long-term incentive awards are subject to greater scrutiny of transparency and payout criteria, he added.

That pressure could intensify as geopolitical uncertainty and AI disruption force companies to cut costs. Executive wage growth may moderate in the future if economic expansion slows and investors demand more discipline, Kunnathele said.

Boards risk criticism if generous executive compensation coincides with cost-cutting without delivering sustainable business gains, said Stanton Chase’s Chawla. Therefore, incentives should go beyond financial performance to include metrics such as employee retention, customer satisfaction and cybersecurity, she said.

Mayur Bhalerao and Rushi Gupta also contributed to this story.

This is the final part of a three-part data series based on the annual reports. The first part examined how long India Inc. branch office managers stay. at the helm, while the second part looked at changing workforce dynamics in Indian companies.