The percentage of CEOs and MDs of Nifty 50 companies who earned more than Rs 50 crore in FY24 has more than doubled compared to FY19, the report said. The economic time.
In the last fiscal year, 22 per cent of CEOs and managing directors earned more than Rs 50 crore, compared with 10 per cent five years ago, the business daily said, citing a Deloitte report.
Among the 10 promoters holding office, 30 per cent earned more than Rs 500 crore in FY24, up from 27 per cent in FY19. Among the 31 promoters holding office, 20 per cent received more than Rs 500 crore, a significant increase from just 4 per cent in FY19, the report noted.
This analysis, which covered 41 Nifty 50 companies, excluded public sector companies and three others where there was no active holder (the MD had voluntarily waived compensation or was on deputation from the parent company).
Non-promoter CEO salaries soar
The average CEO remuneration of Nifty 50 companies increased from Rs 13.1 crore in FY19 to Rs 18.9 crore in FY23 and to Rs 22.6 crore in FY24. The 19.6 per cent year-on-year growth in average remuneration during FY23 is largely attributed to increases in salaries of non-promoter CEOs.
Between FY23 and FY24, the average pay of non-promoter CEOs in the Nifty 50 index grew 19.6 per cent from Rs 18.9 crore to Rs 22.6 crore, while compensation of promoter CEOs increased 6.9 per cent from Rs 23.3 crore to Rs 24.9 crore.
Awards of shares at fair value
Total cost to company (TCC), including long-term share-based incentives (LTI), has been calculated on a fair value basis, which considers the total fair value of share awards granted within a financial year rather than the realised value.
Variable wage dynamics
The share of performance-linked pay at risk in a Nifty 50 CEO’s remuneration package has increased for non-promoter holders, reaching 56 per cent in FY24, up from 53 per cent in FY23. For promoter holders, a decline in profit-linked fee has led to a slight reduction in variable remuneration, from 49 per cent in FY23 to 47 per cent in FY24.
CEO Salaries by Industry
CEO remuneration of IT services and heavy manufacturing companies remains the highest in India, reflecting their size, the scale of their operations and often the overseas location of the CEO in the case of IT services. The median pay of Nifty 50 CEOs in the IT services sector was Rs 49.8 crore in FY24, while that in the heavy manufacturing sector stood at Rs 42 crore.
In FY24, CEOs of Nifty 50 auto companies received an average annual salary of Rs 24.9 crore, followed by CEOs of consumer (Rs 22.6 crore), pharma (Rs 18.6 crore) and financial services (Rs 17 crore) companies. The ratio of Nifty 50 CEO pay to average employee compensation rose to 290 in FY24 from 263 in FY23.
As Indian companies expand and become more global in scale, CEO compensation is expected to rise. The economic time The cited experts stated:
First published: August 14, 2024 | 09:44 IS
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