Indian CEOs’ average salary increases 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 CEO compensation in India stands at Rs 13.8 crore. However, CEOs who were also promoters or members of the promoter family received higher compensation, averaging at Rs 16.7 crore. Anandorup Ghose, Partner and CHRO Programme Leader at Deloitte India, explained that the outpacing of promoter CEO compensation is due to the longer tenure of promoter CEOs and the wide range of compensation numbers, which affects the higher averages.

The survey also revealed that over 50 per cent of CEO target compensation is ‘pay-at-risk’, with professional CEOs having a higher pay-at-risk percentage of 57 compared to promoter CEOs at 47 per cent. Additionally, professional CEOs receive 25 per cent of their target compensation through long-term incentives, often paid through share-linked incentives. Deloitte’s findings indicated that CEO compensation in India has seen high single-digit annualized growth rates.

The wide gap between median and average CEO compensation reflects the range of compensation numbers and some outliers on the higher end. When assessing CEO and CXO performance, companies typically use a holistic scorecard consisting of financial and non-financial metrics and targets. However, incentives for CEOs and CXOs are predominantly focused on financial company-level goals within those scorecards.

The analysis of CEO changes in BSE 200 companies (excluding PSUs) found that 45 per cent of companies witnessed a CEO change over the past five years. The study also revealed that six out of ten new CEOs are internally appointed, with the remaining four being external hires. The survey also highlighted the increasing prevalence of share-based incentives, with more companies using share-based incentives in 2024 compared to 2020.

However, the use of stock options or ESOPs has decreased over the same period. The fifth edition of the Deloitte India Executive Performance and Rewards Survey, launched in September 2023, included input from over 400 organizations and was specific to India, excluding public sector companies.