New Delhi: CEO compensation in India has grown and is fairly placed vis-a-vis the executive pay level globally, but there is scope for improvement on the pay governance front, global consultancy giant PwC said. While top executive compensation levels in India compare favorably with the West, it is alarming that pay governance is yet to find a prominent place on the board agenda, PwC said in a report on executive remuneration. Commenting on the findings of the report, titled "Navigating the path to maturity", PwC India Executive Director (Consulting) Padmaja Alaganandan said: "Indian CEO pay benchmarking in absolute quantum with global peers is not the right comparison. "In absolute terms, Indian CEO pay will be less than global CEO pay. But in terms of purchasing power parity we are actually fairly positioned," she noted. The quantum of compensation has grown significantly, but the accompanying focus on governance and sophistication in how it is delivered has not kept pace, she said. India lacks in executive pay governance, primarily because of the decisions on top management pay packages still resting with the CEO and the HR function at majority of the companies. Besides, the pay proportions of companies who are using "claw back" condition is only up to 25 per cent, and the use of performance-linked conditions, such as employee stock option, is not at the desired level, Alaganandan said. Segmentation of rewards, and balancing between talent pressures and good governance are some of the challenges that companies will face to optimise their CEO compensation programmes in the next decade. "Going forward, there will be more tightening of pay and greater amount of variable pay in the total package, in which case pay will be more aligned with performance delivered," she said. Equity is the preferred vehicle at senior executive level. However there is still limited use of equity vehicles beyond employee stock options or ESOPs. Moreover, post the economic crisis of 2008, the "hiring at any cost" paradigm has been significantly dampened. "The objectives before the meltdown for offering long term incentive plans focused on wealth creation and talent attraction. Today the focus is on sustainability of compensation costs and maintaining internal parity," PwC said. Besides, in some cases, Indian companies are also implementing rules that are in practice in the West like the "claw-back provisions" in incentive plans which allow companies to recover bonuses in case of fraud or restatement of accounts and are also steering clear of the controversial "golden parachute" severance packages, PwC said.