India Inc pays more to CEOs than CXOs
A study, ‘Executive Compensation in India,’ undertaken by Hyderabad based Indian School of Business, which covered more than 2,500 top companies in the country, states that in the recent years the compensation of executives in India has witnessed a sharp spike. The study also points out that Chief Executive Officer (CEOs) in India are paid considerably higher compensation than Executive Directors, popularly known as CXOs. The study notes that the compensation of CXO is less sensitive to stock market movement and hence there is a much lower variation across time.
With specific reference to the policy implications, the study says that domestic policy should be at par with global standards. In fact current tools in executive compensation law and policy are not fully cognizant of the role of vertical and horizontal agency costs. ISB’s study adds that disclosures and corporate oversight, among others measures, must be meaningful and fulfill the intended regulatory rationale.