Flipkart now paying million-dollar salaries to new top hires

Written By Unknown on Jumat, 10 April 2015 | 22.14

BENGALURU: India's biggest online retailer and India Inc toddler Flipkart is paying million dollar-plus salaries along with stock options worth millions more to a clutch of engineers and a strategy expert it has poached from marquee global firms such as Google and McKinsey as part of its strategy to aggressively build a technology capability that can rival Amazon in the country.

Two of Flipkart's latest hires — Punit Soni, who joined from Google as its chief product officer, and Peeyush Ranjan, its head of engineering who also joined the Bengaluru firm from the web search titan — are getting fixed salaries of around $1 million (Rs 6.2 crore) a year each apart from $3-6 million in stock options, according to company sources familiar with their compensation.

READ ALSO: Peeyush Ranjan to join Flipkart as Senior VP

A third recent hire, Saikiran Krishnamurthy, who has joined Flipkart from global consulting firm McKinsey & Co as the chief operating officer of its commerce division, is also being paid a similar amount, they added.

The salaries would make them among the highest-paid engineers and non-board level executives across the Indian startup universe and probably even India Inc. Few Indian companies pay division heads as much, and million-dollar salaries are usually the preserve of CEOs.

The salaries Flipkart is paying the likes of Soni and Ranjan compares favourably with salaries of top executives in India's $146-billion information technology industry.

For example, at Wipro, CEO TK Kurien was paid $1.1 million, excluding stock options, in 2013-14, according to regulatory filings. TCS chief N Chandrasekaran took home a package of nearly $3.15 million while Cognizant CEO Francisco D'Souza took home a pay cheque of close to $1.5 million, excluding stock options.

Infosys' Vishal Sikka gets about $5.08 million, excluding stocks.

Flipkart sources said paying top-dollar salary was essential to lure talent, especially from Silicon Valley working at top global names. Unlike in India, top engineering talent in Silicon Valley can command salaries worth several millions of dollars.
In October 2013, Reuters news reported Twitter paid Christopher Fry, a senior vice-president of engineering at the microblogging site, $10.3 million, just behind CEO Dick Costolo's $11.5 million.

Building a team

"Fixed salary apart, stock options and joining bonuses are an effective tool to attract such talent to relocate from the Silicon Valley," said one person familiar with these hires. Flipkart is under pressure to build a team that can match Amazon on technology and innovation fronts, and fend off sprightly and pugnacious domestic rival, SoftBank-backed Snapdeal.

As ET reported last week, these high-profile hirings underscore a gold rush among fast-growing companies to tap into Silicon Valley for talent to bolster technology capabilities that are often a key differentiator in the fast-growing but cut-throat sector. Experts said such salaries were unlikely to be the norm.

"E-commerce top hiring is similar to how retail looked in 2000 and telecom during 2003-04. New capabilities have to be built, but these salaries are not sustainable," said Anandorup Ghose, who leads compensation and governance practice at Aon Hewitt.

Responding to an email query sent by ET on Thursday, a Flipkart spokesperson said on Friday morning the company does not comment on compensation details. "However, these numbers are completely inaccurate."

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