IT giant Cognizant Technology Solutions Corporation has raised the compensation of its CEO, Ravi Kumar S by 11% to $16.1 million for 2024. In 2023, he received $22.6 million, which included a one-time joining bonus when he was appointed as CEO, according to the company’s filing with US SEC.
While the compensation target was raised Kumar's actual compensation was lower than $16.1 million. The shortfall was due to Kumar's Performance Share Unit (PSU) grants, which are yet to be vested.
Breakdown of Cognizant CEO's 2024 target compensation:
• Base salary: $1.2 million (up 20% from 2023)
• Annual cash incentive (bonus): $2.4 million (up 20%)
• Performance-based stock (PSUs): $7.5 million (up 9%)
• Restricted stock units (RSUs): $5 million (up 9%)
Although his target compensation was $16.1 million, Kumar's actual pay was lower. That’s because most of his performance-based stock won’t vest until future years, depending on results.
In 2024, he received his full base salary, a bonus payout at 107.3% of the target and some stock awards that vested during the year, worth about $4.5 million.
Why His Pay Was Increased
"The Compensation Committee, at its meeting in February 2024, evaluated Kumar’s prior year performance and the updated information provided by Pay Governance for CEOs in the Company’s peer group. Based on these considerations, the Compensation Committee determined that Kumar’s target direct compensation for 2024 should be increased to $16,100,000 (11% increase vs. 2023) to reflect his performance in his first year as CEO and to better algin his target compensation with CEOs in the 2024 peer group, taking into account compensation trends for CEOs," the Proxy Statement said.
The company’s board also said it fully supports Kumar as he works to turn the company around and aims to make Cognizant one of the top four IT service firms by 2027.
However, Cognizant's CEO Ravi Kumar earned 378 times more than the company’s median employee in 2024, according to a company filing. This CEO-to-median employee pay ratio stood at 378:1. As of December 2023, Cognizant had around 336,800 employees worldwide—241,500 of them in India and 42,800 in North America.
Even though his actual earnings were lower than his target package due to stock vesting timelines, Kumar’s salary continues to rise steadily, placing him among the highest-paid executives in India. Ravi Kumar holds an engineering degree from Shivaji University in Kolhapur and an MBA from Xavier Institute of Management, Bhubaneswar. Before joining Cognizant, he served as President of Infosys from 2016 to 2022.
