Senior executives are likely to see a six per cent hike in salary in 2021 in India, according to the latest survey released by Aon plc. Infact, the pandemic has had a significantly less impact on senior executive pay than the 2008-09 global financial crisis, according to Aon’s 10 th Annual Executive Reward Survey.
“At six per cent, the 2021 projected salary increase for senior executives is down by 1.4 per cent from 2020. The COVID-19 pandemic had less of an impact than the 2008-2009 Global Financial Crisis, when projected salary hikes for senior executives had dropped by almost 5%,” said Nitin Sethi, Partner and CEO of Aon’s performance and rewards business in India.
The survey analysed data across 504 companies from more than 20 industries. According to survey findings, excluding long-term incentives (LTI), the median CEO compensation in India ranges from ₹15 crore for owner-promoter CEOs to ₹3.63 crore at Indian private companies.
CFOs earn the most
Apart from CEOs, the highest-paid executives in 2020-21 are the chief operating officers and chief financial officers, followed by the sales heads and chief human resources officers. The head of legal and IT wings are among the lowest-paid executives, the survey added.
The survey also highlighted that the sum of variable pay and LTI as a percentage of total compensation is 52 per cent for CEOs in India compared to 87 per cent for CEOs in the U.S.
Ray Everett, CEO of Aon’s Human Capital &Rewards Solutions across Asia Pacific, Middle East & Africa said, “Executive pay practices in India are catching up with those of US and European companies. Over half of the total compensation for CEOs in India today is linked with business performance. Performance Shares and Restricted Stock Options are becoming more prevalent as more companies are moving away from basic Stock Options.”
Strategy and finance continue to be the top remunerative functions for executives. The survey data also shows that financial institutions and the Fast Moving Consumer Goods (FMCG) sectors continue to lead in India on executive pay, he added.