What’s The Average Compensation For CEOs In India? Deloitte Survey Reveals

The average compensation of a chief executive officer (CEO) in India stands at 13.8 crore rupees ($1.66 million), up 40% from the pre-Covid-19 levels, according to the Deloitte India's Executive Performance and Rewards Survey 2024.

Every second CEO had a target compensation of more than 10 crore rupees in 2024, compared with every third CEO in 2020, the consultancy firm said in a statement. CEOs who were also promoters or members of the promoter family are paid 16.7 crore rupees on average, it added.

Deloitte also said the ratio of promoter to professional CEO compensation increased significantly from around 1.0 to 1.3 over the past four years.

CEO CHANGES

Anandorup Ghose, partner, CHRO Program Leader at Deloitte India, said promoter CEO compensation outpacing professional CEO compensation is primarily driven by two factors.

“Professional CEOs change more often than promoter CEOs due to the longer tenure of promoter CEOs at an aggregate. But it is also important to note that the range of promoter CEO compensation is very wide, and that affects the higher averages," he added.

The consultancy firm said that an analysis of CEO changes in BSE 200 companies (excluding public sector undertakings) revealed that 45% of companies witnessed a CEO change over the past five years.

Six of every 10 new CEOs are homegrown (internally appointed), while the remaining four CEOs were external hires, it added.

PAY-AT-RISK COMPENSATION

Deloitte said while CEO compensation has increased, more than 50% of target compensation is pay-at-risk.

For professional CEOs, pay-at-risk at 57% is much higher than for promoter CEOs at 47%, it added.

The consultancy firm noted that professional CEOs have 25% of their target compensation delivered through long-term incentives, which for most companies, is paid through share-linked incentives.

COOs & CFOs

Chief operating officers (COOs) and chief financial officers (CFOs) continue to command the highest compensation premiums in India among the other CXOs, Deloitte said.

For these two roles, 44% of target compensation is at-risk, with almost half of it being driven through long-term incentives, it noted.

ASSESSING PERFORMANCE

Deloitte said while assessing CEO and CXO performance, most companies use a holistic scorecard that includes a mix of financial and non-financial metrics and targets.

However, incentives for CEOs and CXOs are still tilted towards financial company-level goals within those scorecards, it added.

In addition, companies are transitioning toward a more structured approach to bonus payouts, and the role of discretion in compensation decision-making is on the decline, Deloitte said.

“Large Indian companies with more mature and globally aligned compensation practices are pivoting toward performance shares and use of multiple incentive plans for different employee cohorts,” Ghose said.

Conversations in the boardroom have also shifted from the need for share-based payment to the return from these incentive structures to stakeholders, he added.

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