what was the need to increase dividend payout by 72.63% when the company is unable to give a salary hike of even 1% to its six lakh employee
what was the need to increase dividend payout by 72.63% when the company is unable to give a salary hike of even 1% to its six lakh employees?
The company argues the future looks uncertain, so the salary hike is frozen from April 2025 onwards (FY26).
Do you wish to know how much was TCS Salary Hike in the previous year (FY25)? 2.91%.
Sounds hard to believe? Look at these figures from the latest TCS financial statements:
Employee Salary Cost in FY24: Rs. 1,40,131 crore
Employee Salary Cost in FY25: Rs. 1,45,788 crore (with 6,433 additional employees hired in FY25)
Average Per Employee Wage Increase YoY (Adjusted for Headcount) = 2.91%
In other words, this is the second consecutive year when the average salary increase for TCS employees remains nearly zero.
Now compare this against inflation in the last two years, and you will know what’s happening with the economy at the ground level.
The Final Part: Imagine This
TCS Dividend Paid in FY24: Rs. 26,426 crore
TCS Dividend Paid in FY25: Rs. 45,612 crore
(Difference) Increase in Dividend in FY25: Rs. 19,186 crore (72.63%)
Imagine if this excess dividend of Rs. 19,186 crore was distributed to 6 lakh employees instead of the shareholders. The shareholders would still have received the same dividend as the previous year (Rs. 26,426 crore).
But guess what would be the average salary hike per employee? 13.16%
TCS engineers can cross-check this simple calculation themselves.
Why TCS Didn’t Do This?
Dividend is not an “expense” in the P&L account. But “Salary” is an expense. So, if salary is increased instead of dividend, shareholders become unhappy.
To maintain the stock price, a company must either show growth or pay dividends. TCS has given up any hope for growth. It does not even try. So, it has to pay dividends.
Just like Tata Sons, all large conglomerates in India are stock price-driven, and not growth-driven.
That’s why India is witnessing:
(a) Massive wealth concentration in a few hands (b) Poor economic growth (c) High stock prices
Global technology companies do not pay any dividends to shareholders. They pay high salaries to keep employees motivated plus reinvest their profits in R&D and make capital investments for future growth.
But thanks to India’s corporate dinosaurs, the country seems to be undergoing a quiet shift from a growth economy to a stock-price-driven economy.
TCS is cash Cow in Tata Group. It has to keep passing profit to Tata Sons so that other weaker companies can be helped etc....but that is at the expense of TCS employees....
You analysis is very good. It should be published in paper and everyone should know how TCS is treating its employees.
They are becoming one of the worst company where employee can see even the slightest of growth in their earnings. Government should take action against such companies and there should be a law of fixed minimum increments that can tackle the inflation.
If you want to spend more time in TCS, BUY one TCS share each month 😂 After 5/6 years you will have atleast 70 shares. 70*100(average dividend)= 7K You will get more money from dividends than hike😂 The more you buy the more you gain😁
Good info. Can u share in linked in? No point sharing here. Tcs is such a shit. I joined 5 years back with 17.5 lpa and now my salary is 18.1 lpa.
That too in hand is less due to variable pay being cut these days.
Do we have a choice - No.
What can we do- upskill and leave the company.
That’s it.
TCS - Infosys - HCL - Wipro - any company you take is the same.
For the skills TCS employees have, they should be fortune enough to be employed.
TCS is for lazy, outdated, zero ambition folks who just exist for the sake of existing.
I’m ashamed to be one of them.
If I was hardworking and would’ve used my brain, why would I waste my time in this outdated sweatshop.
If u look with other angle low hike will impact only eployee who don't have any ESPOS for higher management it always win situation.
They don't get hike for now they will recieve dividend once TCS release it's hike then that also
Who don't have ESPOS :- salary hike (panita always low) Who have ESPOS:- hike+dividend (it always be higher)
if 19,000 crore was distributed between employees. On average there would be 3 lakhs hike for each employee. This is a significant hike boost for freshers and mid level employees. Freshers: 40-80% Mid level: 15-30% Upper level: 1-10%
