Indian CEOs’ Average Salary sees 40% Growth to Around Rs 14 Crore from Pre-Covid Level: Deloitte Report

The Deloitte India Executive Performance and Rewards Survey 2024 reveals that the average CEO compensation in India stands at Rs 13.8 crore. However, CEOs who are also promoters or members of the promoter family receive an average of Rs 16.7 crore. Anandorup Ghose, Partner, CHRO Programme Leader at Deloitte India, explains that the disparity is driven by two factors. Firstly, professional CEOs change roles more frequently than promoter CEOs due to the longer tenure of promoter CEOs.

Secondly, the wide range of promoter CEO compensation affects the higher averages. Deloitte reports that over 50% of CEO target compensation is ‘pay-at-risk.’ Professional CEOs have a pay-at-risk of 57%, much higher than the 47% for promoter CEOs. Additionally, 25% of professional CEO target compensation comes from long-term incentives, often in the form of share-linked incentives.

CEO compensation in India has seen high-single-digit annualized growth rates, with a wide gap between median and average CEO compensation reflecting a broad range of compensation figures. When assessing CEO and CXO performance, most companies use a holistic scorecard that encompasses financial and non-financial metrics and targets. However, incentives for CEOs and CXOs are primarily geared towards financial company-level goals. The percentage of companies using share-based incentives has increased, while the prevalence of stock options or ESOPs has decreased.

A study of CEO changes in BSE 200 companies revealed that 45% of the 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 survey included insights from over 400 organizations and excluded public sector companies. The fifth edition of the Deloitte India Executive Performance and Rewards Survey was released in September 2023.

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