Average salary of Indian CEO is over Rs. 11cr: Deloitte
What's the story
As per an executive remuneration survey by Deloitte India, the average compensation of Indian CEOs in FY22 stood at Rs. 11.2 crore- a three-year high. Meanwhile, the median salary stood at Rs. 7.4 crore. The survey includes compensation for professional as well as promoter CEOs across 470 companies related to finance, manufacturing, IT, and consumer products. It also takes into account the long-term incentives.
Context
Why does this story matter?
The survey has shed a light on the way financial compensation for top bosses is decided. For most roles, the pay package is influenced more by the company's size than the sector in which it operates. Notably, around 50-84% of short-term incentives are dependent on company's performance. Also, in the aftermath of the COVID-19 pandemic, firms are placing a greater emphasis on employee retention.
Statistics
CEOs earned Rs. 9.4 crore on an average in FY21
The average pay package for CEOs in FY21 was Rs. 9.4 crore, with the median standing at Rs. 6.4 crore. This is slightly lower than the figures from FY20 when the compensation stood at Rs. 9.8 crore and Rs. 6.9 crore, respectively. For professional CEOs in FY22, the average compensation was Rs. 10 crore, with a median of Rs. 7.4 crore.
Statement
'Limited talent pool responsible for salary hikes'
In a statement to The Economic Times, Anubhav Gupta, a senior consultant at Deloitte India, described the reasons behind rising pay packages for top bosses across the Indian companies. "Limited and highly sought-after talent pool, the talent that is highly fungible within and even across sectors, and continued gap to global pay levels contribute to the increase in executive pay."
Figures
Heads of sales draw 4 times less pay than CEOs
Deloitte's survey found that the CEOs earned 2.7 times the average pay of chief financial officers and 3.7 times more than business unit heads. Their pay was also 4.1 times higher compared to heads of sales and chief human resource officers (figures including long-term incentives). The average compensation of the CEOs was also 2.4 times more compared to the COOs.
Mobility
Executives continue to switch jobs despite rising pay
Despite rising pay in the form of long-term incentives, executives continue to be highly mobile both within and across sectors. The survey claims that at least two out of five companies had a new CEO since 2016. Out of the new, one in three was hired from outside, while out of every three externally hired top bosses, two were CXOs in their previous companies.