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Execs in India to get higher salary than Asian peers

Last updated on: March 27, 2012 08:51 IST

Execs in India to get higher salary than Asian peers

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Executives in India are likely to take home a fatter salary than their peers across Asia this year as average base pay for heads of organisations in the country are likely to rise by 8.3 per cent, says a report.

According to global staffing consultancy Mercer executive remuneration survey findings, the average base pay for heads of organisations in India is likely to rise by 8.3 per cent in 2012, as compared to 8.4 per cent in 2011.

Despite this fall, "India leads the actual average base pay increase amongst Asian countries followed by China – at 6.8 per cent for 2011; and projected at 6.5 per cent in 2012," the survey said.

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Tags: India , China , OIndia , Asia

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"Growth, leadership shortages and high inflation have boosted India's executive pay in the past years," said Shanthi Naresh, Principal, Human Capital, Mercer.

Mercer further noted that fixed pay is still considered the most important and effective pay component in India and constitutes 58 per cent of total remuneration for the head of an organisation.

Companies in India are, however, increasingly opting for more flexible pay structures which can be adjusted based on business performance.

"Linkage of pay and performance is not as strong in India as in other Asian countries. Progressive companies in India are now trying to link well defined performance parameters with incentive payouts to recognise and reward performance," Naresh added.

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Further, survey findings clearly underscored the need for greater transparency in awarding incentives. We expect to see increased focus on governance, regulation, and disclosure in performance based pay in the coming years.

Other participating companies from Asia have higher pay-at-risk as compared to Indian companies, as long-term incentives make up for 10 per cent of the average Indian company head's remuneration package as compared to 25 per cent reported by countries in Asia.

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Though stock options still remain the most popular type of long term incentive plan in India, some Indian companies are now moving towards other mature vehicles like "performance units", the report noted.

The 2011/2012 Asia Executive Remuneration Survey - India Report, which covered 201 companies across Asia, around 83 per cent respondents rated retention of executive talent and succession planning for executives as top talent issues for most Indian companies, followed by leadership development for executives.

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