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Institutional EYE

Commentary on Corporate Governance Issues

CEO Pay Sector Analysis: Healthcare

This is the time of the year when boards are called upon to fix pay levels of its members for the coming financial year. This series on CEO pay, compiled by IiAS using data from comPAYre, IiAS’ cloud-based pay-versus-performance tool, is aimed at sensitizing boards on the remuneration trends across the market, as a basis for determining appropriate pay structures. This fifth piece in the series is focused on pay levels in healthcare companies, which includes pharmaceutical companies and healthcare providers.

The median CEO pay in the healthcare sector is aligned with that of S&P BSE 500. However, in specific pockets, there are a few worrying trends – more than 1/4th of the CEOs draw a remuneration of more than Rs.100 mn, CEO pay as a multiple of employee pay is more than 100x, and lack of gender pay equality. Further, the sector is dominated by promoter family presence – around 33% of companies have four or more executive directors from the family on their boards and around 74% of the CEO positions are being held by family members.

Exhibit 1: Median pay in sector

The median remuneration in the sector is significantly aligned with the S&P BSE 500. But, there is a wide disparity in the pay for CEOs and that of other EDs.

Exhibit 2: CEO pay to median employee pay (x)

The CEOs in the sector draw remuneration amounting to more than 100 times of that of the median employee pay.

Exhibit 3: Pay levels of 5 highest paid CEOs in sector (

Almost 25% of CEOs in the sector were paid more than Rs.100 mn in FY17.

Exhibit 4: Fixed vs Variable Pay (%)

The pay mix in the sector is similar to that of the market. Only two CEOs in the sector was granted ESOPs in FY17.

Exhibit 5: Board Compensation as % of Profits

The aggregate board compensation, as a % of net profits, is higher than the rest of the market.

Exhibit 6: CEO Pay Growth in sector (%)

In the sector, the CEO pay levels in the last five years have broadly been aligned to performance.

Exhibit 7: Number of Promoter vs Professional CEOs in the sector

There is high promoter presence in the sector with around 74% of the CEO posts being held by promoters.

Exhibit 8: Median pay of Promoter vs Professional CEOs in the sector (

The pay for professional CEOs in the sector is significantly less than that of promoter CEOs.

Exhibit 9: Gender Mix in the sector

Women representation in the sector is better than the overall market – there are a total of 21 women executive directors in the sector.


  • Data has been sourced from annual reports for the S&P BSE 500 companies and compiled using IiAS’ proprietary pay analytics platform, comPAYre

  • Data pertains to CY2016 or FY2016-17 (depending on financial year-end for respective companies)

  • PSUs have been excluded from the analysis

  • Fair value of stock options granted has been included while calculating overall pay

  • The pay growth chart pertains only to directors who have been on the board for the past five years

A modified version of this report was published by Mint on 23 April 2018. You can read the earlier reports by clicking the links below:

For Full report, please click here

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