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Indian CEOs received an average compensation of ₹11.2 crore in FY22, with median compensation of ₹7.4 crore, which is highest in past three years, reported Economic Times on 22 June.
In FY21, the average CEO compensation was ₹9.4 crore -- with ₹6.4 crore median, while in FY20 the compensation was ₹9.8 crore -- ₹6.9 crore, says data from 2022 Deloitte India Executive Remuneration Survey. This also includes compensation for both promoter CEOs as well as professional CEOs, taking the long-term incentives (LTIs) into account.
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The average compensation for professional CEOs stood at ₹10 crore, with a median of ₹7.4 crore. Over half of the total compensation for CEOs is variable on average.
The survey, done by Deloitte, covered more than 470 companies across manufacturing, consumer products, IT, ITeS, services, life sciences and financial services sectors.
"Limited and highly sought-after talent pool, the talent that is highly fungible within and even across sectors, and continued gap to global pay levels contribute to the increase in executive pay. At the same time, boards, promoters and shareholders are focusing on linking a larger part of the pay to performance," Economic Times quoted Deloitte partner Anubhav Gupta as saying.
The survey further says that the average compensation for the CEOs was 2.7 times that of chief financial officers, 3.7 times that of business unit heads, and 4.1 times that of chief human resource officers and heads of sales, in terms of the total cost to company including long-term incentives.
Also, the CEOs average compensation was 2.4 percent times higher than COOs, while compensation for CXOs mostly remained consistent through the last three years, the report added.
The survey added that nearly 84 per cent of short-term incentives (STIs) of CEOs are dependent on company performance, while for CXOs, it was at 50 per cent. The report further added that 80 per cent of firms prefer a target-based approach for determining STIs.
