9th Annual Rewards Conference, 2016

Aon 9th Annual Rewards Conference

The year 2015 was an important year in the evolution journey of Corporate Governance and Executive Pay practices in India. With the competitive landscape for executive talent expanding beyond traditional industries, expectations of management with respect to wealth creation, expectations of various stakeholders from management and new disclosure requirements under Companies Act - 2013, the Boards and Compensation Committees have an unenviable task of providing the right balance. The Aon 9th Annual Rewards Conference to be held on 16th June at the Grand Hyatt Mumbai aims to bring you research and insights on the evolving executive rewards practices based on four important pillars i.e. Competitive Compensation, Performance and Pay Alignment, Risk Mitigation and Governance.

Executive compensation has always invoked interest amongst shareholders, management, regulators and analysts. The right pay quanta and the right pay mix have been primary subjects of discussion in most board meetings.

A comprehensive analysis of executive compensation of 380 companies from India showed that on an average more than half of CEO pay was linked to performance during 2015-16 with the fixed component shrinking even further. This is a substantial change over the past 5 years when just a third of the average Indian CEO’s pay was variable.

This shows increasing convergence of CEO compensation in India with global practices. At a global level:

- Fortune 250 companies having 70 percent allocation to long term incentives
- Performance Pay accounting up to 85 percent of CEO pay globally

While stakeholders seem to be welcoming this shift towards an outcome driven pay, how the dynamics of executive compensation will evolve further in India is an interesting space to watch.

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Aon India Consulting