Indian CEOs’ Salary Surged 40% to Around Rs 14 Crore on Average Post-Covid: Deloitte Report

The Deloitte India Executive Performance and Rewards Survey 2024 reports that the average CEO compensation in India is Rs 13.8 crore. However, CEOs who are also promoters or members of the promoter family receive an average of Rs 16.7 crore in compensation. The survey indicates that the outpacing of promoter CEO compensation compared to professional CEO compensation is primarily driven by two factors. Firstly, professional CEOs change positions more frequently than promoter CEOs due to the longer tenure of the latter.

Secondly, the wide range of promoter CEO compensation affects the higher average. Deloitte highlights that over 50 percent of CEO target compensation is ‘pay-at-risk’, with professional CEOs having a notably higher rate of 57 percent compared to 47 percent for promoter CEOs. Additionally, professional CEOs have 25 percent of their target compensation delivered through long-term incentives, mostly distributed as share-linked incentives. The survey notes a high-single-digit annualised growth rate for CEO compensation in India.

There is a significant gap between median and average CEO compensation (Rs 9.3 crore versus Rs 13.8 crore), indicating a wide range of compensation numbers and some outliers on the higher end. CEO and CXO performance assessment often incorporates a holistic scorecard encompassing financial and non-financial metrics. However, incentives for CEOs and CXOs primarily focus on financial company-level goals within these scorecards. Deloitte’s findings also reveal that the use of share-based incentives by companies has risen, with 75 percent employing them in 2024 compared to 63 percent in 2020, while the prevalence of stock options or ESOPs has decreased from 68 percent in 2020 to 49 percent in 2024.

An analysis of CEO changes in BSE 200 companies (excluding PSUs) shows that 45 percent of companies witnessed a CEO change over the past five years. Six out of ten new CEOs are internally appointed, with the remaining four being external hires. The survey, conducted in September 2023, involved over 400 organizations in India and did not include any public sector companies.