CXOs pay hike in India expected to be 8.9% in 2022, highest in 6 years: Aon

Amid a talent churn and positive business outlook, the pay hike at top executives level in India is likely to be 8.9 percent in 2022, a six-year high, global human resource consulting firm Aon said on May 18.

The hike of 8.9 percent will be one percentage point higher than in 2021 and highest since 2017.  In 2016, the CXO pay hike was at 9.3 percent, said Aon in its annual Executive Rewards Survey that collected data from 475 companies across 15 sectors.

The CXO pay hike was 7.9 percent in 2021, 5.1 percent in 2020 and 8.1 percent in 2019.

“With fundamentals of the economy remaining strong and business sentiments being positive, there were strong tailwinds which resulted in Top Executives salary increase to be projected at 8.9 percent, highest in the last half a decade,” Aon said on 18 May.

As per the findings, while startups are likely to pay or paying up to 9.5 percent hike to CXOs this year, it is 9.3 percent in manufacturing, and 9.2 percent in IT and ITes sectors.

Life sciences, financial institutions and consumer durables are the other top three sectors in terms of CXO raise but their pay hike projection is going to be less than the overall projection of CXO pay increase this year.

The survey found that pay at risk, which is the sum of variable pay and long-term incentives (LTI), for CEOs stands near 60 percent, while C-level executives, including the chief operating officer, chief financial officer, sales head and chief human resources officer, follow closely behind at 50 percent.

“Over the last few decades, a large percentage of India Inc has turned to outside talent instead of building from within. However, in the wake of the COVID-19 pandemic, talent is in short supply and the cost of attracting, retaining and engaging leadership talent that grows business is rising rapidly.

“Not only is the average executive compensation increase highest in five years, but variable pay and equity grants have also risen as companies cannot risk losing key talent at senior levels as this has implications on delivering business performance,” said Nitin Sethi, partner and CEO, India for Human Capital Solutions at Aon.