CEO pay slows, but CFO compensation climbs to ₹4.5 crore: Deloitte

India Inc’s top executive pay story is diverging. CEO compensation is still rising—but at its slowest pace since the pandemic—while CFO pay is accelerating, reflecting a shift in demand and accountability at the top.

According to the Deloitte India Executive Performance and Rewards Survey 2026, median CEO pay stood at ₹10.5 crore in FY2025–26, up just 5% year-on-year, marking the weakest growth since COVID-19. In contrast, median CFO compensation has climbed to ₹4.5 crore, with finance leaders recording the highest increase among CXOs.

CEO PAY GROWTH HITS A CEILING

The slowdown in CEO pay is closely tied to the structure of compensation. Roughly one-third of CEO earnings are linked to stock awards, and weaker equity market performance over the past 12–18 months has dampened overall gains.

“Given the ongoing underperformance of Indian equity markets… it is natural that pay increases were lower last year,” Anandorup Ghose, Partner at Deloitte India, said in the report.

The moderation signals a broader recalibration rather than a contraction. Boards and remuneration committees, Deloitte noted, are unlikely to react sharply, instead adjusting compensation strategies in line with evolving market conditions and geopolitical uncertainty.

CFOS EMERGE AS BIGGEST WINNERS

If CEOs are seeing restrained growth, CFOs are emerging as the most sought-after—and rewarded—leaders.

The report attributes this to a combination of factors: high attrition in finance roles, sharper focus on capital efficiency, and increased direct accountability to shareholders. In many organisations, CFOs are also taking on expanded mandates, including board-level responsibilities.

The result is a clear shift in pay momentum. CXO compensation overall rose between 4% and 10%, but CFOs led the upper end of that range, underlining their growing strategic importance.

SHIFT IN HOW COMPANIES PAY

Beyond headline numbers, the survey points to a deeper transformation in executive compensation design.

Indian companies are moving away from uniform reward structures. Remuneration committees are increasingly deploying multiple long-term incentive plans tailored to different talent cohorts, with multi-year stock grants becoming more common for senior leaders.

Larger firms, particularly Nifty50 companies, are adopting more complex performance share plans, while smaller firms continue to rely on ESOP-led structures.

At the same time, organisations are showing greater willingness to exercise discretion. While performance metrics remain data-driven—spanning both financial and strategic indicators—boards are applying judgement to align pay outcomes with long-term business priorities.

PERFORMANCE OVER MARKET MOVEMENT

The volatility in equity-linked rewards is also prompting a rethink. Companies are beginning to place greater emphasis on internal performance metrics rather than relying solely on share price movements.

“Boards and CHROs are driving sustainable value creation,” Ghose noted, pointing to stronger executive contracts and downside accountability mechanisms.

This aligns with broader trends in executive governance, where process discipline and long-term value are increasingly prioritised over short-term market signals—a theme also explored in earlier People Matters coverage on evolving CXO accountability frameworks.

WHAT COMES NEXT

The data suggests that executive pay in India is entering a more mature phase—less reactive, more structured, and increasingly differentiated by role.

While CEO pay may remain subdued in the near term, demand for finance leadership is likely to sustain upward pressure on CFO compensation, especially as companies navigate capital constraints, regulatory scrutiny, and global volatility.

At the same time, the rise of roles such as the chief digital officer—now increasingly recognised at the CXO level—signals that the next frontier of executive pay may be shaped as much by capability as by hierarchy.