April 24, 2023
Their average annual salary package has reached about INR 11.9 crore in 2023
In 2022, Indian Chief Executive Officers’ (CEOs) average salary packages stood at INR 11.2 crore
However, the average annual salary for Chief Experience Officers (CXOs) stood at INR 3.2 crore, the same as last year
The Chief Operating Officer's (COO) total compensation is closest to that of the CEO
The average annual salary package of CEOs in India has increased by 6.25% to about INR 11.9 crore in 2023, inclusive of variable pay, compared to INR 11.2 crore in 2022, according to a survey by Deloitte.
Experts said that Indian executives are still in high demand, even for positions outside of India, and the increase in CEO compensation is consistent with the country’s GDP growth. Furthermore, they noted that executive compensation decisions now include additional design variables such as pay distribution, long-term incentives, vehicle options, performance metrics, and linkages.
There are two subcategories within the CEO compensation category: promoter CEOs and professional CEOs. While the average salary of a promoter CEO has decreased to INR 13.45 crore this year from INR 14.03 crore in 2022, it has increased to INR 11.4 crore from INR 10 crore for a professional CEO.
CEO (promoters and professionals combined) compensation still comprises a significant component of pay at risk. Since FY20, the proportion of long-term incentives in the CEO (professional) pay mix has increased from 29% to 33%.
The experts further mentioned that the boards of prominent companies are investing greater attention in balancing shareholder, financial, competitive, and regulatory dimensions while managing executive remuneration.
CXOs’ compensation remains flat
Meanwhile, the average compensation of a CXO this year is just over a quarter of that of a CEO (promoters & professionals combined) at 27%, according to the survey.
The average annual salary (total cost to company) to CXOs stood at INR 3.2 crore, the same as last year. The reason for the zero change to CXO compensation, according to Deloitte, is that the pool has seen an influx of young talent whose previous packages were relatively low, especially in the areas of digital, technology, sales, and marketing. Also, several organisations are adding new roles at the CXO level, like that of chief digital officer, which has weighed on the average number.
The survey revealed that the COO’s total compensation is closest to that of the CEO among CXOs. On average, the CEO’s total compensation is 2.5 times that of the COO, 2.9 times that of the chief financial officer, 4.1 times that of the head of sales, 4.2 times that of the business unit head, and 4.7 times that of the chief technology officer. Variable pay accounts for a significant portion of the discrepancy between CEO and CXO compensation.
The survey covered six major industries: manufacturing, consumer products, IT/ITeS, life sciences, services and financial services.
Source: Economic Times