CEOs, CXOs and other senior executives are expected to see their salaries go up by 9.1% in 2023, which will be slightly lower than the 9.7% increment they got during 2022, according to Aon India’s 12th annual executive rewards survey released on Monday.
The average compensation for a chief executive officer (CEO) in India jumped 19% year-on-year to Rs 8.4 crore in 2022 against Rs 7.05 crore a year ago. In the last four years, CEO salaries have gone up by 21%, the survey noted.
Among the other top C-suite officials, the position of chief financial officer (CFO) is the highest paid role among the BSE 100 companies, with the average total cost to company of Rs 3.99 crore. CFO salary is double that of chief technology officers (CTOs), which is the second-highest paid role among BSE 100 companies at Rs 1.97 crore. Chief marketing officers come after that, earning on an average Rs 1.28 crore annually, followed by chief human resource officers earning Rs 1.2 crore as average total CTC.
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The study analysed data across 519 companies from more than 25 industries. It highlights that the sum of variable pay and long-term incentives (LTI) for total compensation, the component of LTI has increased to 40%, up from 26% in 2015-16.
Amongst the BSE top 30 companies, LTI or long-term incentive is provided at 176% of the fixed pay for CEOs and at 103% for others. The average LTI amount for CEOs for BSE Sensex organisations is Rs 10 crore.
“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, organisations seek to adopt executive pay programmes that drive the right behaviour,” said Nitin Sethi, chief executive officer (human capital solutions), India and South Asia at Aon.
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Among other highlights, the study finds that one in three organisations are focusing on improving the diversity levels for the board and senior managerial positions. Also, with the rising shareholder activism, pay governance has become a key focus area for India Inc.