Professional CXOs dominate India Inc’s million-dollar-plus compensation club in FY23

Professional CXOs dominate India Inc’s million-dollar-plus compensation club in FY23


New Delhi | Bengaluru: Vishakha Mulye, chief executive of Aditya Birla Capital, was the highest earning CXO in the country last financial year, taking home ₹274.21 crore including ESOPs worth ₹264.04 crore that she exercised as whole-time director at ICICI Bank.

In the second place was Pawan Munjal, CMD of Hero Moto Corp, with a compensation of ₹99.55 crore in FY23, up from ₹84.35 crore in the previous year, according to a study of the BSE 200 companies conducted for ET by leading search firm EMA Partners India.

Unlock Leadership Excellence with a Range of CXO Courses

Offering College Course Website
Indian School of Business ISB Chief Digital Officer Visit
Indian School of Business ISB Chief Technology Officer Visit
IIM Lucknow IIML Chief Operations Officer Programme Visit

Professional CXOs dominated India Inc’s million-dollar-plus compensation club in FY23 with almost twice as many professional managers in the elite league as promoters. Of the 179 CXOs who took home more than $1 million last fiscal, a record 66.5%, or 119, were professionals, up from 59% in FY22.

For the purpose of the study, the compensation includes exercised stock options, and the data has been sourced from the annual reports of the companies.

“These numbers are not surprising… professionals today have an opportunity to command a fair share of the value they create,” said K Sudarshan, managing director of EMA Partners India.

Capture

“It is also a huge reflection of the evolution of Indian businesses and the depth and scale our economy can offer. There are scores of professionals who have benefited from such opportunities our market had to offer in the past 10-15 years,” said Sudarshan.

However, despite the list being headed by a woman, there are only seven women in the list of 179 million-dollar CXOs for FY23.

Keeping pace with the growth of businesses, the number of C-suite executives earning a million-dollar-plus salary, or ₹8.2 crore with the rupee pegged at 82 per US dollar, at BSE 200 companies hit a new high in FY23, rising 4.67% from 171 in FY22, the study showed.

In FY22, India Inc’s million-dollar club had expanded by 37% compared to a decrease of 17% in the pandemic-hit FY21.

The total compensation of C-suite executives went up 7.56% to ₹4,256 crore, from ₹3,957 crore in FY22. Here, too, professional CXOs amassed the bulk of this increase with the collective compensation for professional CXOs going up by 21.08% while that of promoters registering a decrease of 9%.

One of the key drivers of increased compensation is that “in several industries, companies are competing for the best talent globally and to attract that talent, the benchmark is not just India”, said Vinita Bali, independent director and former MD at Britannia.

“Additionally, surprising as it may sound, the availability of top-notch talent is limited, which is why we see significant movement across companies in the same industry and that is a trigger for higher compensation,” she added.

Shriram Subramanian, MD at corporate governance advisory firm InGovern, said one reason for the increased compensation of professional CXOs is because promoter CXOs get compensated in the form of dividends.

“As Indian companies see robust growth, and are reaching global scale, in order to attract and retain quality talent, companies are no longer averse to paying CXOs very good compensation,” he said. “Shareholders only expect that a large component of the compensation be variable, including more in terms of ESOPs.”

EMA Partners’ Sudarshan said the steady increase in the share of professionals versus promoter CEOs reflects the changing nature of Indian businesses which have now built global scale and are truly board-governed and professionally managed.



Source link

Author: Shirley