While assessing CEO and CXO efficiency, most firms use a holistic scorecard that features a combine of monetary and non-monetary metrics and targets. (Representative picture)
According to Deloitte, CEO compensation in India has seen excessive-single-digit annualised development charges.
The common CEO compensation in India stood at Rs 13.8 crore, up 40 per cent in contrast with pre-COVID-19 instances, and greater than half of the general remuneration is linked to quick-time period and lengthy-time period incentives, says a Deloitte report.
According to the Deloitte India Executive Performance and Rewards Survey 2024, common CEO compensation stands at Rs 13.8 crore, whereas CEOs who have been additionally promoters or members of the promoter household are paid Rs 16.7 crore on common.
“Promoter CEO compensation outpacing professional CEO compensation is primarily driven by two factors. Professional CEOs change more often than promoter CEOs due to the longer tenure of promoter CEOs at an aggregate.
“But it is also important to note that the range of promoter CEO compensation is very wide, and that affects the higher averages,” stated Anandorup Ghose, Partner, CHRO Programme Leader, Deloitte India.
According to Deloitte, whereas CEO compensation has elevated, greater than 50 per cent of goal compensation is ‘pay-at-risk’. For skilled CEOs, pay-at-danger at 57 per cent is far larger than for promoter CEOs at 47 per cent.
Professional CEOs have 25 per cent of their goal compensation delivered by way of lengthy-time period incentives, which for many firms, is paid by way of share-linked incentives.
According to Deloitte, CEO compensation in India has seen excessive-single-digit annualised development charges.
“The wide gap between median and average CEO compensation (Rs 9.3 crore versus Rs 13.8 crore) indicates the wide range of compensation numbers and some outliers on the higher end,” it added.
While assessing CEO and CXO efficiency, most firms use a holistic scorecard that features a combine of monetary and non-monetary metrics and targets. However, incentives for CEOs and CXOs are nonetheless tilted in direction of monetary firm-degree objectives inside these scorecards.
On lengthy-time period incentives, Deloitte stated the proportion of firms utilizing share-based mostly incentives continued to extend (75 per cent in 2024 vs 63 per cent in 2020) and the the prevalence of inventory choices, or ESOPs, continued to lower (49 per cent of firms in 2024 vs 68 per cent of firms in 2020).
“Large Indian companies with more mature and globally aligned compensation practices are pivoting towards Performance Shares and use of multiple incentive plans for different employee cohorts. Conversations in the boardroom have also shifted from the need for share-based payment to the return from these incentive structures to stakeholders,” Anandorup Ghose added.
Meanwhile, an evaluation of CEO adjustments in BSE 200 firms (excluding PSUs) revealed that 45 per cent of firms witnessed a CEO change over the previous 5 years. Six of each 10 new CEOs are homegrown (internally appointed) and the remaining 4 CEOs have been exterior hires.
The fifth version of the Deloitte India Executive Performance and Rewards Survey was launched in September 2023. More than 400 organisations participated on this B2B India-specific survey, which didn’t embrace any public sector firms.
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