Resource Bridge · CEO & CFO Practice Insights
One of the concrete advantages of specialising exclusively in CEO and CFO search is that it justifies building tools a generalist firm simply cannot. The time, effort, and data investment required only makes sense if you are going to use the tool repeatedly, across the same role, year after year. Our CEO and CFO Compensation Calculator is one such tool - built specifically for the Indian market, from the ground up.
The need came directly from client conversations - both at the start of a mandate and at the point of making an offer to a chosen candidate.
Most clients arrive with an internal benchmark: what the incumbent is being paid, topped up with what a few key competitors pay their CEOs or CFOs. That works well enough in straightforward situations. But it breaks down quickly when the role is new, when the size difference between the client and their reference companies is significant, or when the hire they're targeting comes from a different industry altogether.
For firms looking to make a business-defining hire, the relevant benchmark often isn't the direct competitor - it's firms that have done well in the broader sector. If you're in building materials with a strong B2C and channel play, the right benchmark might include FMCG companies. If you want to hire someone who has scaled a business significantly larger than yours, you need to know what CEOs and CFOs at those firms are actually being paid.
The question wasn't just "what is market compensation?" It was: given a specific set of company parameters, what is the likely compensation range - estimated robustly, using published variables that are intuitive and reliable, without the data collection effort becoming a bottleneck in itself?
We started with 1,000 listed companies - beginning with the ET500 and adding companies to enrich each cohort across revenue size, industry sector, and geography. For these companies, we mapped CEO and CFO compensation across 10 years, from FY2016 to FY2025, using published sources like CMIE, annual reports, and annual returns - cross-checking throughout to make sure the numbers were robust.
A few things worth noting about the data. On the positive side, published compensation figures capture actual payouts in a given year rather than the notional numbers in offer letters. If a company targets a bonus of Rs 1 crore but the CEO actually earns Rs 1.2 crore or Rs 0.8 crore, the published number reflects the real outcome.
On the other hand, published numbers have gaps. ESOP value depends on whether ESOPs were exercised in that year. Cash LTI plans may not show up if the payout didn't fall in that year. Some figures included one-off items like gratuity or superannuation payouts that had to be stripped out. In a few cases, CEOs or CFOs were being paid across two or more legal entities, which needed to be consolidated. Cleaning all of this took roughly three months for a dedicated team - from an initial universe of 1,000 companies, we ended up with clean, usable data for approximately 930.
From that dataset, we built a model around the variables clients actually use when thinking about compensation - for CEOs, these are revenue size, profitability, industry sector, geographic region, PAT and revenue CAGR, and whether the company is Indian or MNC. The model produces a sum-of-components compensation stack that estimates a likely range given those inputs. We back-tested the model using statistical techniques to confirm the outputs are in line with actual observed values.
Use 01
Before signing a mandate, we sit with the client to map out how compensation would need to flex depending on who they want to hire. For instance, how much more would it cost to hire a CFO from a high-ROCE company with similar revenue and sector characteristics? Or how much room is there to adjust if the client is willing to soften the revenue size requirement? This exercise helps clients get clarity on the trade-offs - and even when they go with the original budget, the fact that they explored the options gives them greater comfort with the decision.
Use 02
At the point of making an offer to the chosen candidate, the calculator gives us a data-based foundation for what would otherwise be an emotionally charged conversation. Compensation discussions at the CXO level are rarely straightforward - current compensation is complex to compute, expectations vary, and both sides often operate on different reference points. Having a robust, independently built benchmark makes that conversation materially smoother for both client and candidate.
Use 03
In select cases, we have provided compensation benchmark reports to corporates as a standalone paid service - outside of any active search mandate. Not a core focus, but a natural extension of the tool for clients who want a reference point for board or remuneration committee discussions.
Use 04
Following repeated requests from CFOs and CEOs wanting to benchmark their own compensation, we built an online paid calculator where a candidate can enter their compensation components and company parameters to receive a custom benchmark report. It gives candidates an impartial, data-backed reference - independent of what any one firm or recruiter tells them.
Any firm could want to build a tool like this. But the actual development is only viable for a specialised firm. The model has to be customised to each role - our CEO and CFO versions are different - and a typical CXO layer has around ten members in most companies. A three-month investment per role only makes sense if that role is your entire focus. Without that depth of custom, role-specific data, the model quickly becomes unreliable.
