Performance pay helped top India Inc executives get hikes in 2013

Dec 30 2013, 11:43 IST
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India Inc pay hikes: 'Performance of many executives has been better this year compared to last year and despite the global slowdown.' (Reuters) India Inc pay hikes: 'Performance of many executives has been better this year compared to last year and despite the global slowdown.' (Reuters)
SummaryTop India Inc executives weather 2013 storm as performance-linked pay gets them 10-22 pct pay hikes.

Advisory P Thiruvengadam is of the view that top executives witnessed moderate increases in salaries that just barely compensated for the inflation.

Predicting a brighter 2014, experts believe that next year holds a lot more in terms of new jobs and the average increment could be at least 15 per cent for top executives.

"Being the chief executive of an Indian company has never been more rewarding for professionals with expensive cars, a large house, overseas holidays and an eight-figure salary, with year-end bonus and stock options thrown in," MANCER's Sinha said.

Meanwhile, tough business climate had its fallout as well and some companies saw changes in their top management team. The attrition rate was also high.

Unison International has estimated that attrition rate of executives was on an average 14 per cent, more than in 2012.

Individually, data provided by MANCER Consulting showed that pharmaceutical industry faced the highest level (30-35 per cent) of attrition rate among its executives followed by IT/ITES sector (20-25 per cent), healthcare (15 per cent), chemicals (14 per cent) and real estate (10 per cent).

Lowest attrition rate was witnessed by steel sector and the telecom sector at 2 per cent and 4 per cent, respectively.

Experts say that a large part of attrition can be attributed to under-performance and cost-cutting measures, while there have also been cases of early retirement.

Randstad pegs the average tenure for top executives at 6.8 years and estimates 60 per cent of Indian CEOs to be holding office for less than 5 years.

Sector-wise, senior executives in many industries such as telecom, automobiles, infrastructure, real estate, power and aviation had the most disappointing time owing to slowdown, falling rupee, rising cost of fuel and raw material as well as difficulty in raising funds for business operations.

In contrast, top corporate leaders across IT, ITES, healthcare, FMCG, hospitality, retail, e-commerce, education had a relatively rewarding year.

"Rupee depreciation augmented the good performance of companies with export opportunities," Randstad's Uppaluri said.

"Power and Infrastructure has definitely been the worst hit last year owing to a tough political scenario as projects haven't moved well and it has been difficult to perform," Spectrum's Gupta noted.

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