Institutional EYE

Commentary on Corporate Governance Issues

CEO Pay: Sector Analysis (Key Sectors)

May 31, 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 tenth piece in the series is focused on pay levels across several key sectors.

 

An IiAS study on executive remuneration reveals that, in the past five years, CEO pay in the top 500 companies has outpaced performance. This is a worrying trend across most sectors, especially the Automobiles, FMCG and Engineering companies. Further, in sectors like Construction Materials, where there is some degree of linkage between pay and performance, the median pay levels and remuneration multiples are significantly higher.

 

To address this, compensation committees in these sectors may need to rethink the entire pay construct and devise pay arrangements which are more equitable and help align executive expectations with stakeholders’ desire for fairness, benchmarking, and comparability.

 

You can read this report by clicking this link.

 

A modified version of this report was published by Mint on 28 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

Part 9: CEO Pay: Sector Analysis (Engineering)

 

 

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