The compensation analysis shows top executives across sales, marketing or customer services firms taking an average of ₹1.94 crore remuneration in 2022. Operations (manufacturing) follows next with ₹1.93 crore, followed by finance (₹1.83 crore), strategy (₹1.72 crore), HR and admin (₹1.65 cr), technology and ITeS (₹1.5 crore), operations (₹1.44 crore), supply chain and manufacturing (₹1.35 cr) and legal (₹1.27 cr).

The pay mix for CEO and key CXO roles continues to move towards higher pay at risk, the survey finds. Around 44% of companies are using restricted stock units as a vehicle for awarding long term incentives, while 22% are using performance units as a vehicle to award long-term incentives, reveals the survey.

As companies mature in their rewards philosophy, there is an attempt to balance ownership, performance and retention through stock options, performance shares and restricted shares, respectively, it says.

Pay at risk — a sum of variable pay and long-term incentives to total compensation — for CEOs stands near 60%, while C-level executives including the chief operating officer, chief financial officer, sales head and chief human resources officer follow closely behind at 50%.

Nitin Sethi, partner and CEO, India for human capital solutions at Aon, said in the wake of Covid, 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,” adds Sethi.

The annual long-term incentive for CEOs on average is 125% of the fixed pay, it finds. Most companies use a mix of performance and retention-based grants, with at least 50% of this amount linked to performance measures such as shareholder return, profit, revenue and cashflows.

Aon executive rewards survey

Salaries of top bosses to rise 8.9% in 2022; highest in 5 yrs