The sum of variable pay and LTI as a percentage of total compensation is 52 percent of CEOs in India compared to 87 percent for CEOs in the US.
Senior executives across India Inc will get a 6 percent pay hike in 2021, said the Aon Executive Rewards Survey.
The study analysed data across 504 companies from more than 20 industries. Excluding long-term incentives (LTI), the median CEO compensation in India ranges from Rs 15 crore for Owner-Promoter CEOs to Rs 3.63 crore at Indian Private Companies.
The sum of variable pay and LTI as a percentage of total compensation is 52 percent of CEOs in India compared to 87 percent for CEOs in the US.
Nitin Sethi, partner and CEO of Aon’s performance and rewards business in India, commented, “At 6 percent, the 2021 projected salary increase for senior executives is down by 1.4 percent from 2020. The COVID-19 pandemic had less of an impact than the 2008-2009 Global Financial Crisis, when projected salary increases for senior executives dropped by almost 5 percent.”
Variable pay for top executives is most impacted by the COVID-19 pandemic, with pay-outs for executives who had a ‘Meets Expectations’ performance rating projected to drop from 95 percent in 2019-2020 to 85 percent in 2020-2021.
Ray Everett, CEO of Aon’s Human Capital & Rewards Solutions across Asia Pacific, Middle East & Africa said that the executive pay practices in India are catching-up with those of US and European companies.
“Over half of Total Compensation for CEOs in India today is linked with business performance. Performance Shares and Restricted Stock Options are becoming more prevalent, as more companies are moving away from basic stock options,” added Everett.
Apart from CEOs, the highest-paid executives in 2020-2021 are the chief operating officer and chief financial officer, followed by the sales head and chief human resources officer.
The head of legal and head of IT are among the lowest-paid executives. Strategy and finance continue to be the top remunerative functions for executives. The survey data also shows that financial institutions and the Fast Moving Consumer Goods (FMCG) sectors continue to lead in India on executive pay.
