india ceo compensation: Average CEO compensation in India up 21% in last 4 years - The Economic Times 02/02/24, 08:26

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English Edition | 02 February, 2024, 08:25 AM IST | Today's ePaper

Average CEO compensation in India up 21% in last

4 years
By Prachi Verma, ET Bureau Last Updated: Jan 30, 2023, 03:20:00 PM IST

Synopsis
India's senior executives including chief executives are likely to get a 9.1% average salary hike in 2023 compared to 9.7% in 2022 and 7.9% in
2021, according to Aon's 12th annual salary survey. The average chief executive compensation in 2023 is Rs 8.4 crore, according to Aon that
mapped about 150 CEO data points. It has increased by 21% in the last four years, higher than pre-COVID years.

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India's senior executives including chief executives are likely to get a 9.1% average
salary hike in 2023 compared to 9.7% in 2022 and 7.9% in 2021, according to Aon's
12th annual salary survey. Aon plc, a global professional services Hrm, has released
Hndings from its latest 'Executive Rewards' survey in India in which it has
analysed data across 519 companies in India from more than 25 industries
covering over 50 executive positions. The average chief executive compensation in
2023 is Rs 8.4 crore, according to Aon that mapped about 150 CEO data points. It
has increased by 21% in the last four years, higher than pre-COVID years.

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For board and senior managerial positions, one in three organisations are focusing on improving diversity levels.
Company boards are also embedding environmental, social and governance (ESG) factors, diversity and succession
metrics in the long-term and short-term goals for CEOs and executive leaders. Within Pay at Risk – the sum of variable
pay and long-term incentives (LTI) for total compensation - the component of LTI has increased to 40% of the total
compensation, up from 26% in 2015-16.

“Senior executives’ salary increases continue to focus on pay at risk, indicating the emphasis on rewarding executives for
the value they bring to the organisation. In a rapidly evolving, volatile business environment, organizations seek to adopt
executive pay programs that drive the right behaviours, are cost e^ective and contribute to long-term business results,”
Nitin Sethi, chief executive o^icer, Human Capital Solutions, India and South Asia at Aon, said. "Organisations can
therefore beneHt from a data-driven approach to make better decisions regarding complex executive compensation
issues while navigating business volatility," Sethi said.

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india ceo compensation: Average CEO compensation in India up 21% in last 4 years - The Economic Times 02/02/24, 08:26

The study found that amongst the Bombay Stock Exchange’s (BSE) top 30 companies, LTI is provided at 176% of Hxed pay
for CEOs and at 103% for other c-level executives, including the chief operating o^icer, chief Hnancial o^icer, sales leader
and chief human resources o^icer. The average LTI amount for CEOs for the same set of organisations (BSE top 30) is Rs
10 crore.

Compensation, and its related governance, continues to be an important issue for employers as they strive to build and
maintain a resilient workforce. “With rising shareholder activism, pay governance has become a key focus area for India
Inc. As a result, organisations are updating their Malus clauses that is additional checks before vesting of long-term
executive incentives – particularly in cases of material Hnancial restatement," Pritish Gandhi, director and practice
leader of the Executive Compensation and Governance Practice in India at Aon, said.

"At the same time, claw back clauses which allow organisations to retrieve past pay-outs under exigent circumstances of
fraud and misconduct are also being applied for a duration of three to Hve years, as organisations design their 2023
executive compensation programs,” Gandhi said.

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