Global management consultancy Hay Group released the Top Executives Compensation report, revealing that the average CEO’s compensation in India has crossed the INR 2 crores / USD 400,000 mark, on a cost to company (CTC) basis.

1. News Release
Scarcity of holistic CEOs to push CEO compensation north
Trend of cross‐sector employability of CEOs coupled with scarcity of holistic CEOs to drive the war
for CEO talent
• CEO compensation at large, complex organizations has crossed the INR 7 crores mark
• Greater focus on linking performance to CEO compensation reflected in higher proportion of
short term variable pay and evolving prevalence of LTIs
• Benefits have been on a decline, with chemicals sector at 16% of CTC and transportation at
6% of CTC
New Delhi/Mumbai, February 22, 2012: Global management consultancy Hay Group released the Top
Executives Compensation report today, revealing that the average CEO’s compensation in India has
crossed the INR 2 crores / USD 400,000 mark, on a cost to company (CTC) basis.
The study also shows that compensation is pegged to be more than INR 7 crores / USD 1.4 million at
larger, more complex organizations. For the next level of top executives (excluding the CEO), the average
compensation is above INR 1 crore / USD 200,000, on a CTC basis.
The Top Executive Compensation Report 2011‐2012 features insights from about 87 organizations across
sectors, analyzing compensation practices of top executives – CEOs, their direct reports, and heads of
businesses as well as functions.
Sridhar Ganesan, Rewards Practice Leader, Hay Group India, comments, “The Indian CEO market has
always seen a large pool of “operationally‐excellent” CEOs, but a constant scarcity of “managing‐
business” CEOs has driven compensation high. Compensation is expected to further spiral upwards owing
to the increasing cross‐sector employability of CEOs – the new breed of “Lateral CEOs”. Instances such as
global cement major recruiting an Indian investment banker as the CEO of its India operations and head of
Indian manufacturing company joining an IT company to lead its Manufacturing vertical, point to cross‐
sector movements. This broader landscape of opportunities, coupled with the scarcity of “holistic” CEOs,
will drive executive compensation northwards.”
He further adds, “This also has implications on the next line of top executives – the average CEO’s salary is
2.6 times that of the rest of the executive population, in terms of total CTC, excluding long‐term incentives
(LTIs). However, there is very little total compensation differential between top executives across core
and enabler functional roles. Reward philosophy driving business accountability as a top “team” rather
than a few stakeholders is here to stay”.
(Table 1)
Hay Group 1

2. News Release
Table 1
CEO salaries are 2.7 CEO salaries are 2.5
times that of Core times that of Business
Business Roles Enabler Roles
Core Business Roles CEOs Business Enablers Roles
Note:
Core Roles (e.g. Head Sales & Marketing, Head of Manufacturing/ Operations, Business Heads etc)
Enabler Roles (e.g. Head HR, Chief Information Officer, Head R&D etc)
Another marked trend is the growing focus on performance, leading to a more pronounced variable pay
component in overall compensation. The study finds variable pay as a percentage of fixed CTC to be in
the range of 15% to 30%. The performance focus also leads to a growing trend of Long‐Term Incentives,
for both CEO/MD levels as well as Other Executives, with stock options being the most prevalent vehicle.
(Details in Table 2)
Table 2
80%
68%
70%
61% Another trend
60%
is that benefits
50% have been on
40% 36% a decline, as
CEO/MD
30%
28%
Other Executives
organizations
20%
are looking at
12% 11%
8% 7%
cash as an
10%
important
0%
element of
Stock Options Restricted Performance Other LTI Plans
Stock Plans compensation.
(Details in Table 3)
Hay Group 2

3. News Release
Table 3
Covering 87 organizations in India across the sectors of Chemicals, Basic Resources, Oil and Gas, FMCG,
Retail, Construction and Materials, Industrial Goods and Transportation, the Top Executives
Compensation Report is designed to enable organizations to understand prevailing compensation
practices and trends, and assist them in formulating market‐aligned and business‐model affordable
compensation to their Top Executives.
Ends
Notes to editors
Please note: these findings should be credited to ‘global management consultancy Hay Group’, and not ‘Hay’ or
‘Hays’, which are separate and unrelated organisations.
For further information:
Miss Nidhi Mehra
M: + 9818331654
E: nidhi.mehra@haygroup.com
About Hay Group
Hay Group is a global consulting firm that works with leaders to turn strategies into reality. We develop talent,
organise people to be more effective, and motivate them to perform at their best. With 85 offices in 49 countries,
we work with over 7,000 clients across the world. Our clients are from the public and private sector, across every
major industry, and represent diverse business challenges. Our focus is on making change happen and helping
organisations realise their potential. For more information, please visit www.haygroup.com/in
Hay Group 3