NEW DELHI: With a shift in focus from cost optimization alone to also talent retention, the CEO salary has now exceeded pre-pandemic levels. According to a Deloitte survey, this is the first survey year where the average CEO Total Compensation has crossed the Rs 10-Cr mark to Rs 11.2 Cr on Total Cost to Company with Long Term Incentives (LTI).
It’s to be noted that the median CEO total compensation is Rs 7.4 crore. CXO compensation too has seen a bounce-back from the 2021 levels. COO, CFO and Business Unit Head, according to the report, continue to be amongst the top paid CXO roles.
“25% of pay for CEOs was in the form of long-term incentives (e.g. ESOPs). For CXOs, long-term incentives accounted for 20% of pay,” it says. Across most roles, the size of the company had a greater influence on the pay levels as compared to the sector in which the company operates.
The report goes on to add that the increase in pay levels is accompanied by a strong performance linkage. 51% of pay for the CEO is “at-risk” or variable, which means that the realized earnings from this component could drop to zero in case of poor share price and/or fundamental company performance. Similarly, 41% of pay for CXOs is “at-risk”.
Even as the pay is rising, the report points out that executive talent continues to be highly mobile within and across sectors. “Two out of five companies analyzed had at least one CEO change since 2016.”