CEO compensation is a function of the position, performance, person and pay philosophy. Many top earners remain promoter-CEOs. This is well-regulated by shareholders and a welcome trend, as it creates an opportunity to recruit and pay high-performing professionals.
From an overall market perspective, economic growth and strategic globalisation-and high local inflation-drive hikes. Philosophically though, growth in fixed pay has been modest, often in line with inflation. However, the real uptick in numbers may be skewed by the number of value-release events, and hence one-off lumpy equity- related payouts for promoters, professionals and investors.
In terms of performance, the ask of leaders is escalating. For all the hype, there is still a shortage of high-quality leaders in India and hence professionals with relevant industry skills, entrepreneurial mindset, and a tech-first approach. Those who understand the Indian landscape command a premium.
Sector and scale remain important. Top-earning professionals have predominantly been from the technology sector, where India is home to a handful of mature, globally scaled businesses. However, growth and pay have ticked up across other sectors as well. Global capability centres are also coming of age, with high-paying key global roles now based in India. New sector build outs also create demand-supply mismatches, leading to surges in compensation. Think digital, EVs, batteries, renewables, semiconductors.
Since market scale and median US CEO pay is still 10x-plus of India pay, there is some distance to go, but the economic trends and evolving leadership demands are steadily redefining what premium compensation in India truly represents.The writer is Managing Partner, Accord India
