Summary of this article
CEO pay rises 5 per cent, slowest since COVID-19
Stock awards drag overall compensation growth amid market volatility
CFO pay rises fastest due to attrition, accountability
Top executive compensation in India experienced moderate growth during the last year, in which pay hikes were subdued amid volatile equity markets and evolving remuneration strategies, according to the Deloitte India Executive Performance and Rewards Survey 2026 by Deloitte India.
The survey found that the median compensation for non-promoter or professional chief executive officers (CEOs) stood at Rs 10.5 crores, a rise of 5 per cent compared to last year. This is the lowest rise in CEO pay since COVID-19, and is largely attributable to low growth in stock-linked compensation.
Stock awards continue to comprise a large component of CEO pay, making up nearly one-third of the total compensation. However, weaker performance in equity markets over the past 12-18 months has limited the value of such rewards, contributing to the overall moderation in pay growth.
Pay Growth Trends Across CXOs
Compensation growth of other top executives, or CXOs, was between 4 and 10 per cent during the year. Among them, the pay of chief financial officers (CFOs) went up the most.
The median compensation of CFOs has now reached Rs 4.5 crore. The reason for the greater growth in CFO salaries has been attributed to greater attrition, a stronger focus on capital efficiency, and greater accountability to shareholders.
The survey also commented on the growing significance of the role of the chief digital officer (CDO), which, at times, is compared to the level of a CXO. This is the increasing focus that we are seeing on digital transformation across industries.
Performance Incentives Framework
The evaluation of CXO performance in India continues to remain structured and data-driven. Companies evaluate executives based on a mix of financial results and non-financial strategic objectives. While these metrics form the basis of evaluation, organisations also apply some degree of discretion in deciding final rewards.
This approach enables companies to link the compensation of executives to long-term business goals in a way that remains accountable. It is also helpful in managing performance pressures in the short term with broader strategic goals.
Changes In Remuneration Strategy
There has been a definite change in the overall approach to remuneration strategies, particularly in the case of stock-based rewards. Instead of using the same structure for all employees, companies are gradually taking differentiated approaches to different groups of employees. For instance, companies are now favouring a multi-year stock grant for their CXOs, ensuring a linkage to overall performance over a longer period.
Companies are also favourably looking at one-time retention grants for their key talent to ensure overall retention and a better ROI. While large companies, particularly those belonging to the Nifty50 index, are mostly looking at complex long-term incentive plans, such as a multi-year performance share plan, their smaller peers continue to favour traditional stock options or employee stock ownership plans.
Focus On Internal Performance Metrics
The survey also pointed out that there is a gradual shift in how companies are rewarding their executives. There is an increased focus on internal performance measures rather than relying on movements in shares. This may also be due to the fact that equity markets have been quite volatile in recent times. As a result, companies are now focusing on internal efficiencies and value creation in their reward strategies.
