Top executives may get 9% hike: Survey
NEW DELHI: Top executives in India are expected to receive an increment of 8. 9% this year, the highest in six years, according to a survey. The meatiest hikes are expected to be witnessed in sectors such as manufacturing, technology and ITeS, followed by life sciences and finance. Senior executives in India Inc witnessed a salary hike of 7. 9% in 2021, 5. 1% in 2020 and 8. 1% in 2019.
A high of 9. 3% was witnessed in 2016. “Over the last few decades, alarge percentage of India Inc has turned to outside talent instead of building from within. In the wake of the Covid pandemic, however, talent is in short supply and the cost of attracting, retaining and engaging leadership talent that grows business is rising rapidly,” said Nitin Sethi, partner and CEO, India for Human Capital Solutions at global human resource consulting company, Aon, which conducted the survey.
Pay at risk, the sum of variable pay and long-term in- centives (LTIs) to total compensation for CEOs is pegged at around 60%, while C-level executives including the chief operating officer (COO), chief financial officer (CFO), sales head and chief human resources officer follow close behind at 50%, showed data from 475 companies across more than 20 industries.
For companies, these buoyant trends mean that robust salary hikes are expected over the next two years, while roles connected with the future of work will be highly valued. “Not only is the average executive compensation increase the highest in five years, but variable pay and equity grants have also risen as companies cannot risk losing key talent at senior levels as this has implications on delivering business performance,” said Sethi.
The annual long-term incentive for CEOs on average is 125% of fixed pay. Most companies use a mix of performance and retention-based grants, with at least 50% of grant linked to performance measures such as shareholder return, profit, revenue and cash flows.