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Indian executives prefer a clearly worked out pay package rather than an ambiguous one that could potentially be of higher value.
In a global study (Psychology of Incentives Research) by the consulting firm, Pricewaterhouse Coopers (PwC), about 50 per cent senior executives preferred a simpler plan, based on long holding periods for stock.
The study also found that while majority of global respondents preferred deferred cash, Indian executives chose deferred shares over cash. In fact, around 55 per cent of Indian executives believed their firm’s Long Term Incentive Plan (LTIP) was effective.
Commenting on the perception that complex reward plans result in better performance, Ms Padmaja Alaganandan, Executive Director (Consulting), PwC India, said, "Only a limited number of executives will get motivated by highly leveraged and volatile pay packages, hence providing choice and flexibility in pay programmes is essential.”
The study covered over 1,100 senior executives across 43 countries, to understand the impact of pay and incentives on senior executives.
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