CEOs Average Pay is Now 
2 Crore and Above
Bangalore: CEOs average annual compensation in India stands for 
2 crore and above, on cost-to-company (CTC) basis, according to the ‘Top Executive Compensation Report 2011-2012’, released by Global Management Consultancy Hay Group. This study was based on features from 87 organizations across sectors, analyzing compensation practices of top executives – CEOs, their direct reports, and heads of businesses as well as functions.
A CTC pay package generally consists of salary, bonus, commissions, reimbursements and various other benefits. As per the new study, this package is nearly 2.6 times the pay package for other top business executives in the country, whose average pay package is now above 1 crore.
The study says that the CEO compensation has increased on a year-on-year basis and this trend is likely to continue due to the lack of holistic CEOs, but the cross-sector employability of CEOs influence the compensation packet. The average compensation at larger and more complex organizations is more than 7 crore.
The exact reason for this increase in compensation is not known but the government data shows that India’s per capita income grew by 15.6 percent that is it crossed 50,000 level for the first time in 2010-2011. This amount is expected to increase 60,000 mark in this fiscal ending March 31, 2012.
“The Indian CEO market has always seen a large pool of ‘operationally-excellent’ CEOs, but a constant scarcity of ‘managing-business’ CEOs has driven compensation high,” Hay Group’s Rewards Practice Leader Sridhar Ganesan said. The data states that the top management remuneration grew by 36 percent in 2010-2011, while overall staff costs rose by 18 percent. “This also has implications on the next line of top executives – the average CEO’s salary is 2.6 times that of the rest of the executive population, in terms of total CTC, excluding long term incentives (LTIs), Ganesan added.
He says that the compensation is expected to further spiral upwards owing to the increasing cross-sector employability of CEOs and the new breed of ‘lateral CEOs’. He also adds by saying that the global cement major has recruited an Indian investment banker as the CEO of its Indian operations, while the head of Indian manufacturing company has joined as IT company to lead its manufacturing vertical.
The employers are giving increasing importance to ‘performance’ as the percentage of variable pay component has increased in the overall compensation, as per the report. It further states that the variable pay as a percentage of fixed CTC was in the range of 15 to 30 percent.
Hay Group says, this report was designed to enable organizations to understand prevailing compensation practices and trends, and assist them in formulating market-aligned and business-model affordable compensation for top executives.
