CEO compensation is reflective of leadership evolution in India

There’s a quiet shift in CEO compensation in India as corporations attain scale and compete with the best globally. Million-dollar salaries may now be par for the course, but this is not just about salary inflation. This is a testament of corporate India’s global ambition and relevance. A recent EMA Partners India study covering the top 200 publicly listed companies (BSE 200) provides a compelling view of how executive compensation is reshaping itself in India and what is driving this shift. Our study is not merely about rising paycheques; it reflects a deeper shift in Indian corporate leadership. The number of CXOs earning over US$1 million (at a currency conversion rate of ₹84 per US$1) rose to 227 in FY25, up from 213 the previous year, while their aggregate compensation increased over 36%, from ₹5,144 crore to ₹7,025 crore.

Notably, while professional CXOs constitute roughly two-thirds of this cohort, founder leaders witnessed a sharper rise in compensation, with their share of total pay increasing by over 61% compared with ~23% for professional executives. “New-age” digital-economy founders also asserted their presence strongly, securing four of the top ten positions. The recent IPO wave has further accelerated this trend by formalising leadership structures and aligning compensation more closely with market expectations. Boards are now rewarding founder commitment, scaling ambition, and global aspiration — clear markers of a system maturing in both expectation and accountability.

Several deeper patterns emerge when these findings are viewed against longer-term data and broader market dynamics:

· Over a multi-year horizon, the shift is even more pronounced. Since 2021, the number of million-dollar CXOs has risen by ~81%, while total compensation for the highest-paid executives has increased ~77%; signalling not cyclical buoyancy but a fundamental reset in leadership valuations.

· Boards increasingly recognise the strategic value of founder continuity. Compensation for founders, often heavily ESOP-linked, is now a tool to secure long-term vision, align accountability, and reward operational commitment rather than mere ownership.

· The centre of gravity in leadership aspiration has also shifted, with many top executives increasingly gravitating toward high-growth, home-grown ecosystems rather than traditional legacy enterprises as a reflection of where the market’s momentum now unmistakably lies.

· The gender gap remains a stark concern. Women account for only around 4% of million-dollar CXOs, underscoring a structural imbalance that risks constraining the benefits of this leadership evolution.

· India’s leadership pipeline remains narrow. The number of leaders capable of scaling businesses, managing volatility, and meeting public-market governance expectations is limited. Demand for such leaders now far exceeds supply and this dynamic both inflates compensation and raises the stakes of top-level hiring.

As more Indian companies scale and enter public markets, institutional-grade leadership has become mission-critical. Compensation is rising not in isolation but as a response to the complexity of scale, the scrutiny of public markets, and the ambition to compete globally. The shift toward compensating founders for performance signals a maturing ecosystem. India is beginning to reap the rewards of entrepreneurial energy and the government’s sustained digital economy push over the past decade and a half.

Investors and boards are rewarding operational commitment and leadership, not just capital creation. Boards are now benchmarking their leadership against top global talent, which means pay structures that were once largely domestic are increasingly global in their orientation and competitiveness. Yet, even as compensation rises, the critical questions persist:

· Do we have enough high-quality leaders to deliver over the long term?

· And will this surge in rewards translate into broader leadership diversity, or simply reinforce an elite circle at the top?

Attracting and retaining global-calibre leaders has become a core pillar of corporate India’s leadership playbook. Organizations are clearly willing to pay up for top-tier leaders. It’s best not to view million-dollar paychecks for such leaders as compensation inflation; it is a leadership evolution, one that, if steered well, could ignite a generational transformation in how Indian companies scale, stay resilient, and compete globally.

(Gopinadhan KG is Partner at EMA Partners | Member - Asia Pacific Diversity Leadership Council, AESC)