Indian CEOs’ Average Salary Increased by 40% from Pre-COVID Levels to Around Rs 14 Crore: Deloitte Report

According to the Deloitte India Executive Performance and Rewards Survey 2024, average CEO compensation stands at Rs 13.8 crore, while CEOs who were also promoters or members of the promoter family are paid Rs 16.7 crore on average. Anandorup Ghose, Partner, CHRO Programme Leader, Deloitte India, noted that the disparity in promoter CEO compensation can be attributed to two primary factors. Professional CEOs change more frequently than promoter CEOs due to the longer tenure of promoter CEOs.

Additionally, the wide range of promoter CEO compensation significantly affects the higher averages. The survey highlighted that CEO compensation in India has experienced high-single-digit annualised growth rates. The survey also revealed that more than 50 per cent of target compensation for CEOs is ‘pay-at-risk’.

Professional CEOs have a higher pay-at-risk at 57 per cent compared to promoter CEOs at 47 per cent. Furthermore, 25 per cent of the target compensation for professional CEOs is delivered through long-term incentives, predominantly in the form of share-linked incentives. In assessing CEO and CXO performance, companies use a holistic scorecard that includes a mix of financial and non-financial metrics and targets.

However, the incentives for CEOs and CXOs are still tilted towards financial company-level goals within those scorecards. Regarding long-term incentives, the survey observed an increase in the percentage of companies using share-based incentives, with a decrease in the prevalence of stock options or ESOPs. An analysis of CEO changes in BSE 200 companies (excluding PSUs) showed that 45 per cent of companies witnessed a CEO change over the past five years.

Six out of every 10 new CEOs are internally appointed, while the remaining four are external hires. The fifth edition of the Deloitte India Executive Performance and Rewards Survey was launched in September 2023, with over 400 organisations participating in this India-specific survey, excluding public sector companies.