Senior Executives expectedto get around 9% salary increase in 2023: Aon

Senior Executives expectedto get around 9% salary increase in 2023: Aon

(PTI): According to Aon’s latest Executive Rewards Survey in India, for board and senior managerial positions, one in three organisations are focusing on improving diversity levels
Senior executives in India are expected to receive an average 9.1 per cent increase in their salaries this year, up from 8.9 per cent in 2022.
According to leading global professional services firm Aon plc, the average CEO compensation was Rs 8.4 crore, and it has increased 21 per cent in the last four years, as there is an emphasis on rewarding executives for the value they bring to the organisation.
According to Aon’s latest Executive Rewards Survey in India, for board and senior managerial positions, one in three organisations are focusing on improving diversity levels.
Boards are also embedding environmental, social and governance (ESG) factors, diversity and succession metrics in the long-term and short-term goals for CEOs and executive leaders.

Aon’s 12th annual study, analysed data across 519 companies from more than 25 industries.
“Senior executives’ salary increases continue to focus on pay at risk, indicating the emphasis on rewarding executives for the value they bring to the organisation,” said Nitin Sethi, chief executive officer, Human Capital Solutions, India and South Asia at Aon.

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Sethi further noted that in a rapidly evolving, volatile business environment, organisations seek to adopt executive pay programmes that drive the right behaviours, are cost effective and contribute to long-term business results.

“Organisations can therefore benefit from a data-driven approach to make better decisions regarding complex executive compensation issues while navigating business volatility,” Sethi said.

The study found that amongst the BSE’s top 30 companies, long-term incentives (LTI) is provided at 176 per cent of fixed pay for CEOs and at 103 per cent for other C-level executives, including the chief operating officer, chief financial officer, sales leader and chief human resources officer.

The average LTI amount for CEOs for the same set of organisations is Rs 10 crore.

The study further noted that compensation, and its related governance, continues to be an important issue for employers as they strive to build and maintain a resilient workforce.

“With rising shareholder activism, pay governance has become a key focus area for India Inc. As a result, organisations are updating their Malus clauses that are additional checks before vesting of long-term executive incentives – particularly in cases of material financial restatement,” said Pritish Gandhi, director and practice leader of the Executive Compensation and Governance Practice in India at Aon.

Gandhi further noted that claw back clauses which allow organisations to retrieve past pay-outs under exigent circumstances of fraud and misconduct are also being applied for a duration of three to five years, as organisations design their 2023 executive compensation programmes.

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