'Senior executives' average salary set to grow 9.1% in 2023'
Senior executives in India are expected to see an average salary hike of 9.1% in 2023, global professional services firm Aon in its annual report said.
According to the findings of the report, one in three organisations is focusing on improving diversity levels for board and senior managerial positions.
As part of an accelerated effort, boards are embedding environmental, social and governance (ESG) factors, diversity and succession metrics in the long-term and short-term goals for CEOs and executive leaders.
Within Pay at Risk – the sum of variable pay and long-term incentives (LTI) for total compensation - the component of LTI has increased to 40% of the total compensation, up from 26% in 2015-16.
Aon analysed data across 519 companies from more than 25 industries.
The study found that amongst the Bombay Stock Exchange’s (BSE) top 30 companies, LTI is provided at 176% of fixed pay for CEOs and at 103% for other c-level executives, including the Chief Operating Officer, Chief Financial Officer, Sales Leader and Chief Human Resources Officer. The average LTI amount for CEOs for the same set of organisations is Rs 10 crore.
Compensation, and its related governance, continue to be an important issue for employers as they strive to build and maintain a resilient workforce.
Pritish Gandhi, director and practice leader of the Executive Compensation and Governance Practice in India at Aon, commented, “With rising shareholder activism, pay governance has become a key focus area for India Inc. As a result, organisations are updating their Malus clauses that is additional checks before vesting of long-term executive incentives – particularly in cases of material financial restatement. At the same time, claw back clauses which allow organisations to retrieve past pay-outs under exigent circumstances of fraud and misconduct are also being applied for a duration of three to five years, as organisations design their 2023 executive compensation programs”
Nitin Sethi, Chief Executive Officer, Human Capital Solutions, India and South Asia at Aon, commented, “Senior executives’ salary increases continue to focus on pay at risk, indicating the emphasis on rewarding executives for the value they bring to the organisation."