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

According to the Deloitte India Executive Performance and Rewards Survey 2024, the average compensation for CEOs is Rs 13.8 crore. However, CEOs who are also promoters or part of the promoter family receive an average of Rs 16.7 crore. This significant difference is influenced by the longer tenure of promoter CEOs and the wide range of compensation for this group.

Anandorup Ghose, Partner and CHRO Programme Leader at Deloitte India, noted that professional CEOs have a higher turnover rate compared to promoter CEOs, contributing to the disparity in compensation averages. Additionally, over 50 per cent of CEO target compensation is ‘pay-at-risk,’ with professional CEOs having a higher percentage of pay-at-risk at 57 per cent compared to 47 per cent for promoter CEOs. Furthermore, professional CEOs receive 25 per cent of their target compensation through long-term incentives, often in the form of share-linked incentives.

The survey also revealed that CEO compensation in India has experienced high-single-digit annualized growth rates. There is a notable gap between median and average CEO compensation, indicating a wide range of compensation numbers with some outliers on the higher end. When assessing CEO and CXO performance, companies generally use a holistic scorecard encompassing both financial and non-financial metrics and targets, with a focus on financial company-level goals.

The analysis also showed that a considerable percentage of companies in BSE 200 (excluding PSUs) witnessed a CEO change over the past five years. The survey, conducted with over 400 organizations, showcased an increasing shift towards share-based incentives and a decrease in the prevalence of stock options or ESOPs. According to Anandorup Ghose, discussions in the boardroom have transitioned from the need for share-based payment to evaluating the return from these incentive structures to stakeholders.

The fifth edition of the Deloitte India Executive Performance and Rewards Survey, launched in September 2023, did not include any public sector companies. This survey reflects the current trends and dynamics of CEO compensation and performance evaluation in the Indian corporate landscape.