Cash-based pay plan for execs

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Indian organisations are moving towards cash-based compensation for top executives, reveals a Hay Group study. In the overall compensation structure, benefits are increasingly becoming a smaller component of the compensation structure. However, companies will continue to use benefits and perks as ways of recognising their top performers. The idea is to drive the role model behaviour among employees.

The annual top executive compensation report 2014-15 also suggests that performance linkage is steadily gaining importance. Performance linked incentive plans (short and long-term incentives) have become key elements of top executive compensation. The objective of these plans is driving performance on key business and individual metrics. There has been a steady increase across sectors in the prevalence as well as percentage of incentives for MD/CEO and for other senior executives. This implies that there is direct alignment between the goals of the company and the compensation plan, as well as the top executive compensation.

The difference between MD/CEO salaries and other top executives' salaries reducing over the years. The median salary for the MD/CEO is expected to increase to 10.2 per cent in 2015, up from 10 per cent last year while the CEO's top team is expecting a doubledigit pay rise of 10.5 per cent, versus 10.4 per cent last year.