According to Mercer’s 2011-12 Asia Executive Remuneration Snapshot Survey – India Report, Indian heads of organizations are expected to get the best salary hikes of 8.3%, much better than most of their Asian counterparts. The report states that along with rapid growth; leadership shortage and high inflation have helped boost executive pay in India.
The Mercer’s study stated that 83 percent respondents rate retention of executive talent and succession planning as top talent issues for most Indian companies. This was followed by leadership development for executives, which was pointed out by 68 percent respondents.
The study points out that there exists an evident need for companies to explore innovative ways to manage and reward executive talent. Companies are opting for flexible pay structures which can be adjusted based on business performance. Short-term incentives (STIs) as well as long-term incentives (LTIs) are emerging as strong tools for companies to recognize performance of top executives. 73 percent of Indian companies tend to use long-term incentives with stock options being the most popular (40 percent). Going forward, none of the Indian companies expect to make changes to their LTI plans in 2012.
At the same time progressive companies in India are now trying to link well-defined performance parameters with incentive payouts to recognize and reward performance. Organizations are gradually moving towards other mature LTI vehicles like performance units and time contingent restricted shares.