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<ul><li>The average pay of a <keyword id="5645" type="General" weightage="20" keywordseo="ceo" source="Orion">CEO</keyword> is around ₹10-11.2 crore – higher than the pre-pandemic levels.</li><li>The risk component constitutes 51% of pay for a CEO, on an average.</li><li>The average compensation of a CXO is more than ₹3 crore, and almost 40% of total pay is at risk.</li></ul>The CEOs of <keyword id="51318" type="General" weightage="20" keywordseo="indian-companies" source="Orion">Indian companies</keyword> seem to be doing well. According to a Deloitte report, the average CEO pay is around ₹10-11.2 crore, and it’s higher than what it was before the pandemic. However, more than half of the total compensation is ‘pay at risk’, says the 2022 Deloitte India Executive Remuneration Survey report. Pay at risk is the portion of an employee's compensation that is variable – meaning it is at risk of not being paid out. The report says that this risk component constitutes 51% of pay for a CEO, on an average. “The realized earnings from this component could drop to zero in case of poor share price or fundamental company performance,” says the Deloitte report. Risky or otherwise, organizations seem to be keen on hiking compensation for its top brass. However, they want to ensure that the health of their company is good enough to afford it. The report surveyed over 470 companies in India on quantum and structure of executive compensation. The report has used a consistent definition of pay and approach to value long term incentives like stock options. <cmsannotation type="cmsannotation" annotationid="C-suite pay rises too but with riders" comment="subhead" text="C-suite pay rises too but with riders">C-suite pay rises too but with riders</cmsannotation> The pay for the C-suite has also improved as the CXO pay bounced back from the 2021 levels. As per the report, the average compensation of CXOs is more than ₹3 crore and almost 40% of total pay is at risk. Other than CEOs, chief operating officers and business heads are the highest paid CXOs. For CEOs, 84% of short term investment (STI) is dependent on company performance, whereas, for CXOs this percentage is 50%. “Almost 80% of companies prefer a target-based approach for determining STI. We find that 60% of companies use long-term incentives. ESOPs continue to be the most prevalent type of LTI instrument used,” the report says further. <cmsannotation type="cmsannotation" annotationid="Companies changed their LTI plans post IPO" comment="subhead" text="Companies changed their LTI plans post IPO">Companies changed their LTI plans post IPO</cmsannotation> According to the report, one in three companies who have recently listed changed their LTI plan when transitioning. In the last one year many tech companies like Zomato, Delhivery, Nykaa and Policybazaar. A drop of almost 50% is also observed in the annualized equity burn rate of companies that have recently listed when their pre-IPO grant patterns are compared with their post IPO LTI patterns. Two out of five companies in India had at least one CEO change since 2016, while one in three companies hired new CEOs externally. Out of every three externally hired CEOs, two were at a CXO level role in the previous company, the report said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/one-in-four-organizations-plan-to-make-variable-a-part-of-the-wages/articleshow/92388801.cms">One in four organizations plan to make variable a part of the wages</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/health/news/long-covid-symptoms-can-last-up-to-two-months-in-children-says-lancet-study/articleshow/92400864.cms">Long Covid symptoms can last up to two months in children says Lancet study</a>

CEOs are paid more now but half of the earnings are 'at risk'

Most of us think of India as a young country. And as home to one-fifth of the world's young population and with an average age of 29, you're right. But did you know India's elderly population is set to double from its present 153 million to a staggering 347 million, in just 30 years? Moreover, by the end of this century, the population of <keyword id="19894991" type="General" weightage="20" keywordseo="senior-citizens" source="keywords">senior citizens</keyword> in India will surpass the population of those aged under 14, as per a report by the United Nations Population Fund and the International Institute for Population Sciences. As such, with <keyword id="19955368" type="General" weightage="100" keywordseo="Budget-2024" source="keywords">budget 2024</keyword> looming on the horizon, what is it that this burgeoning section of our population wants? We take a look : <h2>Wish 1: Raise deduction threshold for <keyword id="22285655" type="General" weightage="20" keywordseo="mediclaim-premium" source="keywords">mediclaim premium</keyword></h2>At present, senior citizens (aged 60 and above) and super senior citizens (aged 80 and above) can claim a deduction of up to Rs 50,000 on health insurance premiums they pay during the year. For those aged below 60, the annual deduction limit is of Rs 25,000. But, as Tarun Mathur, CBO, Policybazaar.com notes, "There’s a need for an increase in the tax deduction limit for health insurance premiums, to raise the same to Rs 50,000 for individuals, their spouses, and dependent children, and to Rs 1 lakh for senior citizen parents". With insurance regulator <keyword id="6361421" type="General" weightage="20" keywordseo="IRDA" source="Orion">IRDA</keyword> removing the age cap (which was previously 65 years) for buying new insurance policies, health insurance for senior citizens becomes far more accessible. Given that only 20% of India's population aged 60 have any kind of health insurance, a comprehensive insurance coverage with low tax liabilities becomes a necessity for our senior citizens. At present, the government is mulling extending the <keyword id="22285657" type="General" weightage="20" keywordseo="Ayushman-Bharat-Pradhan-Yojana" source="Orion">Ayushman Bharat Pradhan Yojana</keyword> to provide crucial, free healthcare support for India's senior citizens aged above 70. But only time, and July 22nd will tell. <h2>Wish 2: Offer similar tax benefits to pension products as NPS </h2>NPS, or <keyword id="475509" type="General" weightage="20" keywordseo="National-Pension-System" source="Orion">National Pension System</keyword> is a lucrative retirement planning scheme. And it comes with many tax benefits. For instance, if you withdraw up to 60% of your accumulated pension as lumpsum once you turn 60, your withdrawal is tax free. Similarly, if any amount you receive from NPS is reinvested in the annuity plan, it remains tax exempt. However, income from annuities is taxed as per your regular income tax slab. And any early withdrawals that you make (before 60 years) will attract taxes. A standard deduction of Rs 50,000, or amount of annuity income (whichever is lower) can be claimed. But under regular annuities or pension products, senior citizens pay a 10% tax on total taxable income over Rs. 3 lakhs , Rs 20,000 + 20% over amount exceeding Rs 5 lakh, and Rs 1.2 lakh+ 30% on amount exceeding Rs 10 lakh. As Mathur notes, "Pension products like annuity plans should be given the same tax benefits as NPS, since the current taxation does not encourage investment in retirement planning. It’s also necessary to expand Section 80C deductions and add a dedicated category for term insurance because the existing limit of Rs. 1,50,000 is insufficient". Even retirement planner Sanjeev Dawar notes that income from annuities is a primary source of income for retirees. "As such, tax relief is expected since returns, although assured for life, are relatively low. Moreover, they remain fixed and have no sensitivity to inflation". Additionally, Dawar also advocates for special financial considerations for eligible individuals who are compelled to stay in old-age homes in their twilight years. It is also needed that travel concessions, that have been withdrawn, are restarted". <h2>Wish 3: Lowering lock-in periods for elderly </h2>Many schemes like national savings certificate (NSC), unit-linked insurance plans (ULIP) and senior citizen savings scheme (SCSS) are subject to tax deductions, provided they are redeemed after their specific <keyword id="20792448" type="General" weightage="20" keywordseo="lock-in-period" source="keywords">lock-in period</keyword>. For instance, tax-saver FDs, ULIPs and NSC have a lock-in period of 5 years, while equity-linked savings scheme (ELSS) have a lock-in period of 3 years. It would help senior citizens if this lock-in period is reduced, so that they have some liquidity and cash handy during medical or other such emergencies. Additionally, withdrawals should be allowed within lock-in period sans hefty penalties, as is the case right now. <h2>Wish 4: Lowering GST on health insurance premiums </h2>Currently, GST on health insurance premium is payable at 18%, which can translate into a hefty levy, especially since senior citizens end up paying significantly higher premiums to get insurance coverage. For a premium of Rs 30,000, the GST could go as high as Rs 5,400. As per Prasun Sikdar, MD &amp; CEO, Manipal Cigna Health Insurance, "lowering the GST burden on the health insurance premiums will be a huge respite for missing middle and senior citizens to get access to quality healthcare they need and help to significantly boost insurance penetration across India by driving affordability.” <h2> Wish 5: Reduce tax on <keyword id="21695681" type="General" weightage="20" keywordseo="passive-income" source="keywords">passive income</keyword> sources for aged</h2>For most senior citizens, rental income from house, pension and other such passive sources turn into a major income avenue, once they retire from active employment. As such, these should be taxed at a lower slab, and not considered as regular salary. Or else, higher exemption limits should be introduced to allow them to save more. At present, the basic exemption limit for senior citizens between 60-80 years is Rs 3 lakh, while the exemption limit for citizens above 80 years is Rs 5 lakhs. The limits should be revised, keeping in mind how expensive medical care is in current times.

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CEOs are paid more now but half of the earnings are 'at risk'

Vaamanaa Sethi

Budget 2024: Here's what India's elderlies want

Ira Alok Puranik

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