Pay of CXOs, other KMP rose 3.9% in FY24, least in 4 years

This can be attributed to higher share of Esops in remuneration packages

- KRISHNA KANT

Growth in executive compensation at India's leading listed companies decelerated in 2023-24 after two years of strong gains.

The cumulative remuneration for key managerial personnel (KMP) or top management of BSE 200 companies rose by 3.9 per cent year-on-year (Y-o-Y) to 8,304 crore in FY24, compared with ₹7,990 crore a year earlier - marking the smallest uptick in the past four years.

This contrasts sharply with the 27.1 per cent growth in FY23 and the 38.8 per cent surge in FY22, according to data compiled by Business Standard Research Bureau.

There was a slowdown in growth of executive compensation despite a strong rebound in corporate earnings last financial year.

The combined net profit of 151 companies sampled within the BSE 200 index climbed 22.3 per cent Y-o-Y to ₹6.07 trillion in FY24, compared to ₹4.96 trillion in FY23. This stands in contrast to a modest 9.3 per cent earnings growth in FY23.

The deceleration in executive remuneration helped ease the burden on corporate profitability. KMP compensation cumulatively accounted for 1.37 per cent of corporate profits in FY24, down from 1.61 per cent the previous year and a high of 2.87 per cent in FY20.

In fact, the ratio of KMP remuneration to corporate earnings in FY24 was the lowest in at least seven years.