Compensation of Corporate Indian CEOs

8/10/2019 Compensation of Corporate Indian CEOs

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compensation ofcorporate Indian CEOsa comparative study by Randstad Executive Search


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methodology

Compensation of Corporate Indian CEOs, a comparativestudy was done by Randstad Executive Search to provideinsights into the current trend of salaries among CEOs. Thisstudy is across US, Europe and India.

The companies that form the BSE 100 (for India), FT100 (forEurope) and S&P 100 (for US) indices (as of 20th Aug, 2012)

have been used as a basis for the study as they are from across-section of industries and together act as thebellweather of industry performance. To standardize, onlycompensation figures of CEOs were considered (excludingany long term benefits like stock options etc). Indian Publicsector data was not considered while comparing with USand European data, to avoid skew in findings. Thecompensation figures have been compared in Indian Rupees(as common currency) used for study after applying aPurchasing Power Parity (PPP) conversion factor of 20.224*for USD salaries.

The research data has been extracted from secondarysources available in the public domain and none of thecompanies from BSE, FT or S&P were contacted foradditional information. Approximations have been donewherever data was unavailable. Information for a few fieldswere not available, but that does not impact the results ofthe study in a big way.

Key fields for which data was collected were: salaries ofcurrent CEOs, industry type, industry classification, age,Promoter CEO, and Professional CEO.

Industry classification ofcompanies researched

Consumer GoodsFMCG and Consumer products

Energy & InfrastructureEnergy, Power, Oil & Gas, Petrochemicals, and Housing Related

FinanceBanking, Financial Services and Insurance

ICTInformation Technology, Telecom and Communications

ManufacturingAuto, Pharmaceuticals, Metals & Mining, Aerospace & Defense

OthersRetail, Hospitality, Media & Entertainment, Healthcare, Transport andLogistics

*PPP conversion factor source:http://www.economywatch.com/economic statistics/India/Implied_PPP_Conversion_Rate/#otheryears


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The average salary ofcorporate India CEOs isINR 6.3 Crores

It is 45% and 21% lesser whencompared to US and European CEOs.

The gap in the average salary is highest for the ICT,Finance and Others* segment closely followed byConsumer GoodsIn the Manufacturing and Energy & Infrastructure segments, the compensation of Indian CEOs is on par with the EuropeanCEOs. This is due to the higher concentration of promoter CEOs in these two segments.

11.5

8.1

6.3

INR

Crores

INR

Crores

INR

Crores

Segment Compared to US Compared to EUROPE

Consumer Goods -54% -46%

Energy & Infrastructure -40% 0%

Finance -58% -60%

ICT -60% -55%

Manufacturing -37% -4%

Others -60% -30%

All figures in INR Crores

5.7

5.5

3.6

4.2

8.7

4.9

Europe US India

12.4

13.8

11.8

8.6

9.25.5

8.9

9.5

9.1

7

12.410.4

*Retail, Media & Entertainment, Healthcare etc.,.


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Indian CEOs from themanufacturing segmentearn the highest with

INR 8.7 Crores, followed byCEOs from ConsumerGoods with INR 5.6 Crores

The consumer goods segment in India is purely run by professionalCEOs and the average compensation in this segment is highestwhen promoter CEO salaries are removed across segments.

Private Sector CEOs arecompensated 21 timesmore than the Public SectorCEOsWith an average salary of INR 6.3 Crores, Private Sector CEOs arecompensated far better than their Public Sector counterparts, whoearn an average compensation of INR 0.3 Crores. The salaries ofpublic sector CEOs do not include benefits and perquisitesprovided to them by the companies.

Private Sector

Consumer Goods

Energy & Infrastructure

Finance

ICT

Manufacturing

Others

Public Sector

6.3

5.6

5.5

3.6

4.2

8

4.9

0.3

Average Salary in INR CroresSalaries across segments


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Young Indian CEOs earnon par with that of theirWestern counterparts andearn highest among their

Indian peers

Indian CEOs of age less than 49 years earn an average salary ofINR 7.9 Crores in comparison to American CEOs (INR 7.3 Crores)and European CEOs (INR 7.8 Crores) [same age group]. If drilleddown further, there is huge influence of Promoter CEOs in thisage group as well. However, the larger picture is as statedabove.

Promoter CEOs earn 53%

higher than professionalCEOs in corporate India

Further analysis of the compensation data shows that thatManufacturing segment has higher concentration of promotersand the average salary for this segment is INR 12.9 Crores,followed by the Energy & Infrastructure segment with INR 6.5Crores.

India US Europe

> = 60 years

7.5

12.2

9.9

4.7

11.7

7.8

7.9

7.3

7.8

50 - 59 years

< 49 years

Salary comparison across age group

in INR Crores

age

age

age


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for more details, please write to us at

[email protected] call us at

+91 44 61016101

about Randstad India

Randstad India offers the broadest HR services portfolio ranging from Staffing, Search & Selection, HRSolutions and Inhouse Services. The organisation has a vast network of offices across the country to bewithin the reach of clients, candidates and flexi workers. The company, previously called Ma Foi is aleader in the HR services industry in India for the past 20 years and became part of Randstad through its

global acquisition of Vedior in 2008. Randstad is the global #2 HR services provider active in 40 countriesacross the globe. Randstad India continues to focus on developing customised and innovative HRservices, leveraging on its unique strengths of geographical presence and end-to-end capability across allHR service functions.

For more information, please visit www.randstad.in

Disclaimer: This study contains information in summary from data based on secondary research and is therefore intended for general guidance only. It is notintended to be a substitute for detailed research or exercise of professional judgment. Neither Randstad India Limited nor any other member of the globalRandstad organization accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of any material in thispublication.

Compensation of Corporate Indian CEOs

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