Tech Mahindra CEO CP Gurnani’s Salary Halves On Eroding Profit In FY23

The total remuneration of CP Gurnani, chief executive officer of Tech Mahindra Ltd., halved in the fiscal ended March 31, 2023, as the net profit of India’s fifth-largest IT services company declined.

However, his pay was still 467 times the median salary of a Tech Mahindra employee.

In FY23, the outgoing chief executive earned a total of Rs 30.14 crore—including a salary of Rs 2.75 crore, perquisites of Rs 25.56 crore, and a commission of Rs 1.83 crore, according to the company’s annual report for fiscal 2023. That compares with the median remuneration of Rs 6.62 lakh for an average employee.

But while Gurnani’s salary fell 51% year-on-year, that of an average employee rose 25.52%. And that, too, at a time when Tech Mahindra's bottomline reduced in fiscal 2023.

The net profit of the Pune-based IT services firm narrowed by 13.2% year-on-year to Rs 4,832 crore on the back of revenue that expanded by 19.4% to Rs 53,390 crore. Earnings before interest and tax widened by 0.1% over the year ago to Rs 8,029 crore, even as EBIT margin shrank 290 basis points to 15.1%.

The company’s headcount stood at 1,52,400 as the attrition rate eased to 10% on a trailing 12-month basis, according to the annual report.

"With crisis comes opportunity, and at Tech Mahindra, we’ve championed the uncertainties of the past few years to rise beyond: to become bolder, better, and future-ready," Gurnani wrote in his letter to shareholders in the annual report. "While the geopolitical tensions, inflation, and recession have slowed down enterprise tech spending, it has also triggered a greater need for businesses to conserve resources and optimise costs."

"The broader macroeconomy has witnessed significant instability and evolution, which is likely to persist. Nevertheless, there’s also significant demand on the horizon for cost, digital, and business transformation projects in the near-to-medium term," he said.

Gurnani is set to retire as Tech Mahindra CEO by the end of 2023. His successor, Mohit Joshi—who was the former president of Infosys Ltd.—has already come on board as an additional director. He will formally take charge on Dec. 20. His appointment will be up for shareholder approval at the company’s annual general meeting on July 27.

"As I hand over the baton to the incoming MD and CEO, Mr. Mohit Joshi, I have no doubt that the company will continue to thrive under his leadership and reach greater heights," Gurnani said. "I’m sure he will be duly supported by the able leadership team, the collective passion of over 1,52,000 employees, and a culture that pushes boundaries."