India Inc’s top executives saw modest pay growth in FY26, with stock market volatility capping gains for CEOs even as CFOs emerged as the biggest beneficiaries of rising compensation trends.
The median compensation for non-promoter or professional CEOs stood at ₹10.5 crore in FY2025–26, a 5 percent increase year-on-year — the slowest growth since the Covid period — according to a report by Deloitte India.
The muted rise in CEO pay reflects weak equity market performance during the year, which weighed on stock-linked incentives — a key component of executive remuneration.
Nearly one-third of CEO compensation is tied to equity-based incentives such as stock options and performance shares
Sluggish market returns limited gains from these components
Indian benchmark indices logged their weakest annual performance since the pandemic, further dampening payouts
A late sell-off on the final trading day of FY26 also reinforced the weak sentiment in equity markets.
While CEO pay growth slowed, other C-suite executives recorded increases in the range of 4 percent to 10 percent.
Chief financial officers (CFOs) saw the highest jump in compensation
Median CFO pay rose to ₹4.5 crore
Rising attrition, sharper focus on capital efficiency, and greater shareholder accountability drove demand for CFOs
Many CFOs are also taking on expanded board-level responsibilities
The report also highlighted the growing prominence of the chief digital officer role, which is increasingly being elevated to the CXO level.
According to Deloitte India, compensation decisions are becoming more calibrated amid heightened uncertainty.
Market volatility over the past 12–18 months, coupled with geopolitical risks, has led to more conservative pay hikes. Boards and remuneration committees are expected to remain cautious rather than react abruptly, adjusting strategies based on evolving domestic and global conditions.
Companies are increasingly aligning executive pay with long-term performance and strategic goals.
Multi-year stock grants are gaining traction for CXOs
One-time retention bonuses are being selectively used to retain key talent
Performance evaluation combines financial and non-financial metrics, with a strong data-driven approach
Boards retain discretion to align rewards with long-term business outcomes
Larger companies, particularly those in the Nifty50, are adopting more complex multi-year performance share plans, while smaller firms continue to rely on traditional ESOP structures.
Overall, India Inc appears to be moving towards a more balanced and performance-linked compensation framework, with a stronger emphasis on sustainability, accountability, and long-term value creation.
(By arrangement with livemint.com)
