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Median Salary? — The Ghost of Bhoothlingam Revisited
Sunday, 25 May 2026
Eleven years ago, I wrote a blog called "Median Salary?" — dredging up the
near-forgotten ghost of the Bhoothlingam Committee Report of 1978, which
had recommended that the compensation gap between a company's lowest-paid
and highest-paid employee should not exceed 10 times.
The ghost is back. And this time, it is not whispering — it is howling.
A Quick Recap for Those Who Missed the First Haunting
In 1978, the Bhoothlingam Committee laid down what seemed like a reasonable
principle: in a company, the ratio between the salary of the lowest-paid worker
and the highest-paid director should not exceed 1:10.
The committee, bless its soul, forgot to cap the bottom of the pyramid. DA
(Dearness Allowance), linked to a galloping Consumer Price Index, kept pushing
up the wages of the lowest-paid workers. The DCA ceiling on director salaries,
meanwhile, stayed put. I had once projected, while working at L&T, that the
Chairman's salary would eventually be overtaken by the lowest-rung worker's —
such was the absurdity.
That ceiling was eventually removed. The market was set free. Shareholders were
put in charge.
So — how has the free market done?
From 439x to 752x: The Market Has Spoken
In my July 2015 blog, I had cited Business Line data showing the ratio of Top
Honcho salary to Median Employee salary for leading Indian companies:
| Name | Ratio (Own Salary / Median Employee Salary) |
|---|---|
Y C Deveshwar................ | 439× |
Mukesh Ambani............... | 205× |
Aditya Puri...................... | 117× |
Vishal Sikka.................... | 116× |
Chanda Kochar................ | 97× |
Azim Premji.................... | 89× |
Deepak Parekh................ | 19× |
Those numbers seemed shocking in 2015. They look almost quaint today.
Here is what 2025–26 looks like:
| Name | Company | Ratio (Approx.) |
|---|---|---|
Salil Parekh | Infosys | 752× |
C. Vijayakumar | HCLTech | 663× |
K. Krithivasan | TCS | ~330× |
S.N. Subrahmanyan | L&T | ~534× (FY24 base; FY26 pay ₹120.84 cr) |
Sources:
Storyboard18 – IT CEO Pay Ratios, Aug 2025 | BusinessToday – L&T CEO Pay, May 2026
The Bhoothlingam cap of 10× is now a distant ancestral memory. The market
has delivered ratios of 75× that number.
The L&T Story — A Full Circle Moment
There is poetic irony in the L&T chapter of this story.
I worked at L&T decades ago and calculated that the lowest-paid worker's DA-
linked salary would one day catch up with the Chairman's DCA-capped salary.
Today, the Chairman's salary has lapped the field multiple times over.
S.N. Subrahmanyan, L&T's CMD, earned ₹120.84 crore in FY2025–26 — a 59%
jump over the previous year — entering India's coveted ₹100-crore executive pay
bracket. His FY24 pay of ₹51 crore was already 534× the median L&T
employee salary of ₹9.55 lakh.
The Median CEO, Not Just the Outliers
Lest one think this is only about a few headline-grabbing outliers, the Deloitte
India Executive Performance and Rewards Survey 2026 tells us:
Median CEO compensation for professional (non-promoter) CEOs:
₹ 10.5 crore in FY26
And the EY Future of Pay 2026 report notes that median CEO compensation in
Nifty 200 companies has reached ₹7–9 crore, growing at 12–15% year-on-
year, while the average employee is projected to get a 9.1% salary hike in 2026
— and freshers and entry-level employees? Far less, if at all.
The gap is not an exception. It is the system.
And What of Our "India Inc." Top Honchos?
In my 2015 blog, I had asked a pointed question: if we leave executive pay to
shareholders, what about the salaries of Supreme Court Judges and
Government Secretaries — the real custodians of the Republic?
In 2026, a Supreme Court Judge earns ₹ 2.5 lakh per month — roughly ₹ 30
lakh per year. Source.
A freshly minted MBA from a top B-school still walks away with a starting package
of ₹25–35 lakh. A Supreme Court judge — after spending 25+ years navigating
the most complex corridors of law — earns roughly the same, or less, with zero
private income permitted while in office.
In the company called India Inc., we — the citizens — are the shareholders. And
we have allowed this absurdity to persist for over a decade since I last wrote
about it.
Has Anything Changed? A Mixed Verdict.
What has changed:
- SEBI now mandates disclosure of the CEO-to-median-employee pay ratio in
- annual reports — bringing transparency that didn't exist before.
- India's new Labour Codes are prompting companies to relook wage
- structures, at least at the bottom of the pyramid.
- The 60% variable/performance-linked component in CEO pay means their
- packages are at least theoretically tied to outcomes — not purely feudal
- entitlement.
What has NOT changed:
- The Bhoothlingam spirit — that pay differentials within a company should have some ethical ceiling — remains as unimplemented as ever.
- Judicial and civil service pay remains criminally uncompetitive, making it harder to attract the finest legal and administrative minds into public service.
- The asymmetry between wage growth at the top (12–15% CAGR) and at the median (single digits) keeps widening.
The Ghost's Unfinished Business
Bhoothlingam did not lay down an upper limit for the lowest-paid worker. That
turned out to be a flaw — and the market exploited it in both directions over the
decades.
Today, the flaw runs the other way. There is no principled upper limit for the
highest-paid executive either — only the market, the Remuneration Committee,
and a shareholder vote that is rarely, if ever, a genuine check.
I am not arguing for Soviet-style wage caps. The market must price talent. But
there is a difference between market pricing and market rationalisation — where
any number, however astronomical, is justified by pointing to a shareholder
resolution.
Perhaps it is time for a Bhoothlingam 2.0 — not to cap the top, but to ask:
If a company's lowest-paid worker cannot be paid a dignified living
wage, why should its highest-paid executive be entitled to 700× that?
And more urgently: in the company called India Inc., if we want the finest minds
to guard our Constitution, govern our states, and adjudicate our disputes —
perhaps we, the shareholders, should start paying them what they are worth.
The ghost of Bhoothlingam is still wandering the corridors of Udyog Bhavan. It
hasn't found closure yet.
hemen parekh
25 May 2026
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