Institutional EYE

Commentary on Corporate Governance Issues

CEO Pay: Sector Analysis (Engineering)

May 21, 2018

 

This is the time of the year when boards are called upon to fix pay levels of its members for the coming financial year. This series on CEO pay, compiled by IiAS using data from comPAYre, IiAS’ cloud-based pay-versus-performance tool, is aimed at sensitizing boards on the remuneration trends across the market, as a basis for determining appropriate pay structures. This ninth piece in the series is focused on pay levels in the Engineering sector.

 

The remuneration levels in the Engineering sector are reasonable. The median pay for both CEOs and Executive Directors is aligned with that of S&P BSE 500. The industry has been thoughtful in setting CEO remuneration, which is reflected in a moderate multiple to median employee salary, and the relatively lower disparity between CEO and ED median pay. However, the variable pay component in the overall remuneration structure is small, thus distorting the linkage between pay and performance. As a result, CEO remuneration has outpaced profits and revenues in the past five years.

 

You can read this report by clicking this link.

 

A modified version of this report was published by Mint on 21 May 2018.

 

You can read the earlier reports by clicking the links below:

Part 1: Indian CEO salaries outpace performance

Part 2: Bridging the pay gap

Part 3: CEO Pay Sector Analysis: Private Banks

Part 4: CEO Pay Sector Analysis: Automobiles

Part 5: CEO Pay Sector Analysis: Healthcare

Part 6: CEO Pay Sector Analysis: IT

Part 7: CEO Pay Sector Analysis: FMCG

Part 8: CEO Pay Sector Analysis: Construction Materials

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