India’s top companies have more than doubled the fees paid to independent directors over the past five years, a new study shows, as firms seek to boost governance and attract global talent.
A report by consulting firm Deloitte India found that the average compensation for independent directors at Nifty 50 companies nearly doubled from ₹52 lakh in FY20 to ₹1 crore in FY25. The findings, part of Deloitte’s ‘Nifty 50 Independent Director Remuneration Study – 2025 Edition,’ exclude banks and insurance firms, which operate under separate compensation guidelines from the banking and insurance regulators.
The findings of the study were shared exclusively with Mint.
“The increase has been primarily driven by a strong profit growth of Nifty 50 companies over a five-year period, leading to higher commission payouts,” said Dinkar Pawan, director, Deloitte India. Directors are also earning more from higher sitting fees and a greater number of meetings, said Pawan, who also leads Deloitte’s executive performance and rewards practice.
Independent directors now make up a significant portion of these boards, with their representation ranging from nearly 40% to over 50% in the last fiscal year.
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CEO pay
Over the same period, average CEO pay in the same companies rose approximately 50%. However, this comparison is not strictly like-for-like, as CEOs earn significantly more and follow a different remuneration structure. Compensation is also determined by the demand and supply of skilled professionals.
The trend in director pay stands out against a backdrop of fluctuating compensation policies across India Inc. Following the pandemic, companies offered high pay to fuel digital expansion, but as global uncertainty grew and funding dried up, hiring slowed and salary increases were scaled back.
The rising pay for directors comes with heightened scrutiny. Shriram Subramanian, founder of Bengaluru-based corporate governance firm InGovern Research Services, notes that investors are watching closely to see if director performance and time commitment have increased alongside their compensation. “The responsibilities of committee members have increased,” he said.
Driving demand
Regulations mandate all listed companies to have at least a third of their board members as independent directors, a requirement that drives demand for qualified individuals.
Executive search firms confirm the growing demand for and value of these roles. Puneet Kalra, managing director at Russell Reynolds Associates, said demand for independent directors has doubled in the last two to three years.
“This need is going up for many reasons, but mostly either to address the growing realization of preventing governance issues or because family businesses and families are expanding and need almost a bridge between family members and operating management, acting as good counsel at times and arbitrators at others,” said Kalra, who also advises on boards and CEOs for the search firm.
He said when a company firm wants a director who is also on global boards, they are left with little option but to come close to the remuneration standards of US (typically $250,000).
Korn Ferry India chairman and managing director (MD) Navnit Singh pointed to another: “Companies have started allowing their CXOs to take up board positions in a firm that is non-competitive with them.”
Among independent directors, women have seen a faster rise in pay. Their compensation at Nifty 50 companies in FY25 is roughly 2.1 times their FY20 levels, compared to a 1.9 times increase for their male counterparts. Deloitte’s Pawan noted this is due to a combination of more responsibilities and greater representation on boards.
