IT giant Cognizant Technology Solution’s CEO is making headlines because of his salary. The CEO has reportedly received half the salary in his targeted pay package.
While Kumar’s pay package in fiscal year 2024 was Rs 137 crore, his realised salary was Rs 70 crore, as per the US Securities and Exchange Commission (US SEC) filing. This is because the PSUs granted in a year are set to vest in the future, depending on the performance criteria.
Kumar’s Rs 137 crore pay package comprises- a base salary of Rs 10.25 crore ($1.2 million), ACI target of Rs 20.49 crore ($2.4 million), Performance share units worth Rs 64 crore and restricted stock units of Rs 42.68 crore.
However, according to the US SEC, the compensation committee evaluated Kumar’s prior performance in February 2024 and said that the target compensation for 2024 should increased to $16,100,000 (11% increase vs 2023) to reflect his performance in his first year as CEO.
“Kumar’s realized compensation was significantly lower than his target direct compensation primarily because his 2024 PSU grants are scheduled to vest, subject to the satisfaction of performance criteria, in future periods,” the filing added.
Kumar’s 2024 realized compensation consisted of his base salary, 2024 ACI award payout at 107.3% of target, and quarterly vestings of restricted stock units in the aggregate amount of approximately $4,492,000.
The ratio of CEO-to-media employee pay in Cognizant in 2024 is 378:1. Therefore Kumar earned 378x more than IT major’s average employees.