The Salaries of senior executives in India are likely to increase by 8.9 % in 2022, which is highest in five years, after recuperation in business sentiments post pandemic challenges. This was claimed by a leading global professional services firm Aon plc., based on a recent survey.
The data was analyzed across 475 companies from more than 20 industries, by Aon’s 11th annual Executive Rewards Survey in India, whilst it was further illustrated that the median CEO compensation has reached Rs 7.05 crore.
The survey also stated that, strengthening of economic roots and business sentiments attaining certainty resulted in hike in the salaries of top executives’ to be projected at 8.9 % from 7.9 % in 2021.
Also, as per the survey reports, the pay mix for chief executive officer (CEO) and key CXO roles would continue to move towards higher pay at risk. CXO roles are the roles which generally refer to common c-suite executives including CEO, chief financial officer (CFO), chief operating officer (COO), and chief information officer (CIO) etc.
As per the survey, Pay at Risk, which means a sum of variable pay and long-term incentives (LTI) to total compensation – for CEOs stands near 60 %, while C-level executives including COO, CFO, sales head and chief human resources officer follow closely behind at 50 %.
“Over the years, a large percentage of India Inc has believed that the outside talents might help them achieve bigger and better as compared to that of talent within the country. However, Nitin Sethi, partner and CEO, India for Human Capital Solutions at Aon, stated that post pandemic, talent is in short supply and the cost of attracting, retaining and engaging leadership talent that grows business; is rising rapidly,” he further stated that “not only the average executive compensation increased highest in five years, but variable pay and equity grants have also risen as companies cannot risk losing their valuable workforce at senior levels as this has implications on delivering better business performances.”
The survey stated that the annual LTI for CEOs on an average is 125 % of fixed pay. Most of the companies are using a combination of performance and retention-based grants, with at least 50 % of the grant amount linked to performance measures such as shareholder return, profit, revenue and cash flows etc.
(With inputs from agencies)