<p>Salaries across the entire C-suite jumped sharply during 2023. CEOs of private sector companies, predictably, were the highest paid with an average salary of Rs 38.7 million. Be that as it may, the variances are vast, as heads of larger companies earn substantially higher than this figure would suggest. IMA’s Executive and Board Remuneration Report 2023 was recently published, offering an analysis of compensation trends amongst over 100,000 executive and non-executive directors. These individuals collectively served on the boards of 3,133 listed companies and another 14,657 unlisted ones. The report covers a five-year period and draws representation from both the private and public sectors.</p><p>Salaries clearly vary depending on the size of a company and, for the purpose of this analysis, IMA has split the universe into large-cap, mid-cap, small-cap, micro-cap and unlisted firms. The analysis examines trends across these categories and provides insights and information for directors and C-suite executives to benchmark their own compensation based on peers within their industry and company size. Our analysis presents findings based on the 25th, 75th, and 90th percentiles and delves into details of fixed and variable components. What is important, as our report discovered, is a significant variance between what constitutes mean (average) and median pay. Another significant observation that the report emphasizes is the issue of gender gaps in representation and pay.</p><p>Our effort explores various governance matrices, including but not limited to the size and composition of company boards, percentage of non-executive directors (NEDs) and independent directors and board compensation. It also examines issues such as board independence and frequency of meetings, with data from around 18,000 companies and over 19,000 director positions. Approximately 95% of these are Indian private sector enterprises and the balance 5% are multinational corporations. In order to provide some semblance to the figures, our report examines the correlation between revenue, profit and salaries. Not surprisingly, public sector companies tend to have much larger boards, with an average of 15 directors. Private sector ones, on the other hand, have an average of 10.</p><p>PSU salaries are a fraction of private sector peers, with that for CMDs averaging Rs 9.9 million. Interestingly, pay is strongly correlated with company size but not with industry sector. Automotive companies pay very well and so do those in the information technology sector. CFO salaries in the pharmaceutical industry are much higher than their peers in other sectors – logically an outcome of stringent compliance requirements.</p><p>Pay for the non-executive chairman amongst the large-cap category averaged Rs 29 million, with a substantial drop amongst mid and small-caps. NEDs in the private sector receive an average compensation of anywhere between Rs 1.2 to 2.3 million, depending on Indian or MNC. In terms of gender diversity, Indian industry continues to lag considerably behind its European peers. Most boards have only 2 female directors on average, but happily, the proportion of companies with no female representation fell from 5% in 2016 to around 3% now. Clearly, diversity is starting to receive some long-overdue attention. Be that as it may, female representation at the chairman and CEO levels remains embarrassingly poor.</p>
<p>Salaries across the entire C-suite jumped sharply during 2023. CEOs of private sector companies, predictably, were the highest paid with an average salary of Rs 38.7 million. Be that as it may, the variances are vast, as heads of larger companies earn substantially higher than this figure would suggest. IMA’s Executive and Board Remuneration Report 2023 was recently published, offering an analysis of compensation trends amongst over 100,000 executive and non-executive directors. These individuals collectively served on the boards of 3,133 listed companies and another 14,657 unlisted ones. The report covers a five-year period and draws representation from both the private and public sectors.</p><p>Salaries clearly vary depending on the size of a company and, for the purpose of this analysis, IMA has split the universe into large-cap, mid-cap, small-cap, micro-cap and unlisted firms. The analysis examines trends across these categories and provides insights and information for directors and C-suite executives to benchmark their own compensation based on peers within their industry and company size. Our analysis presents findings based on the 25th, 75th, and 90th percentiles and delves into details of fixed and variable components. What is important, as our report discovered, is a significant variance between what constitutes mean (average) and median pay. Another significant observation that the report emphasizes is the issue of gender gaps in representation and pay.</p><p>Our effort explores various governance matrices, including but not limited to the size and composition of company boards, percentage of non-executive directors (NEDs) and independent directors and board compensation. It also examines issues such as board independence and frequency of meetings, with data from around 18,000 companies and over 19,000 director positions. Approximately 95% of these are Indian private sector enterprises and the balance 5% are multinational corporations. In order to provide some semblance to the figures, our report examines the correlation between revenue, profit and salaries. Not surprisingly, public sector companies tend to have much larger boards, with an average of 15 directors. Private sector ones, on the other hand, have an average of 10.</p><p>PSU salaries are a fraction of private sector peers, with that for CMDs averaging Rs 9.9 million. Interestingly, pay is strongly correlated with company size but not with industry sector. Automotive companies pay very well and so do those in the information technology sector. CFO salaries in the pharmaceutical industry are much higher than their peers in other sectors – logically an outcome of stringent compliance requirements.</p><p>Pay for the non-executive chairman amongst the large-cap category averaged Rs 29 million, with a substantial drop amongst mid and small-caps. NEDs in the private sector receive an average compensation of anywhere between Rs 1.2 to 2.3 million, depending on Indian or MNC. In terms of gender diversity, Indian industry continues to lag considerably behind its European peers. Most boards have only 2 female directors on average, but happily, the proportion of companies with no female representation fell from 5% in 2016 to around 3% now. Clearly, diversity is starting to receive some long-overdue attention. Be that as it may, female representation at the chairman and CEO levels remains embarrassingly poor.</p>
