Nifty 50 CEO earnings surge: 1 in 5 now earns over Rs 50 crore: Report
The percentage of chief executives and managing directors at Nifty 50 companies who earned over Rs 50 crore in FY24 has more than doubled compared to FY19, reported The Economic Times.
In the last fiscal year, 22 per cent of CEOs and MDs earned more than Rs 50 crore, compared to 10 per cent five years ago, the business-daily noted, citing a Deloitte report.
Among the 10 promoter-incumbents, 30 per cent earned over Rs 50 crore in FY24, up from 27 per cent in FY19. For the 31 non-promoter incumbents, 20 per cent received more than Rs 50 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 undertakings and three others where there was no active incumbent – the MD had voluntarily relinquished compensation or was on deputation from the holding company.
Non-promoter CEO salaries soar
The median compensation for Nifty 50 CEOs rose from Rs 13.1 crore in FY19 to Rs 18.9 crore in FY23 and further to Rs 22.6 crore in FY24. The 19.6 per cent year-on-year growth in median pay over FY23 is largely attributed to increases in non-promoter CEO salaries.
Between FY23 and FY24, the median pay for non-promoter Nifty 50 CEOs grew by 19.6 per cent, from Rs 18.9 crore to Rs 22.6 crore, while promoter CEO compensation increased by 6.9 per cent, from Rs 23.3 crore to Rs 24.9 crore.
Fair value stock awards
The total cost to the company (TCC), including stock-based long-term incentives (LTIs), has been calculated on a fair value basis, which considers the total fair value of stock awards granted within a financial year rather than the realised value.
Variable pay dynamics
The proportion of pay-at-risk, linked to performance, within a Nifty 50 CEO’s compensation package has risen for non-promoter incumbents, reaching 56 per cent in FY24, up from 53 per cent in FY23. For promoter incumbents, a decline in profit-linked commission has led to a slight reduction in variable pay, from 49 per cent in FY23 to 47 per cent in FY24.
Industry-wise CEO salaries
CEO compensation in IT services and heavy manufacturing companies remains the highest in India, reflecting their size, scale of operations, and often, the overseas location of the CEO in the case of IT services. The median pay for Nifty 50 CEOs in IT services was Rs 49.8 crore in FY24, while in heavy manufacturing, it stood at Rs 42 crore.
In FY24, CEOs of Nifty 50 auto companies received a median annual pay of Rs 24.9 crore, followed by CEOs in consumer companies (Rs 22.6 crore), pharmaceuticals (Rs 18.6 crore), and financial services (Rs 17 crore). The ratio of Nifty 50 CEO pay to the median remuneration of employees rose to 290 in FY24 from 263 in FY23.
As Indian companies expand and become more global in scale, CEO compensation is expected to increase, The Economic Times cited experts as saying.
First Published: Aug 14 2024 | 9:44 AM IST