While salaries remain below global benchmarks as the Mercer survey shows, these must be adjusted for cost of living and related to overall income levels.

K Sudarshan, Managing Partner, EMA Partners International

 "CXO salaries are moving up but, by and large, are still significantly lower than their counterparts in developed markets"

No doubt, CXO (a generic term to cover executives from CEOs to CFOs, CTOs and CIOs) compensation levels in India are headed north, but they are still significantly lower than their counterparts in developed markets.

The recent increase in compensation we are witnessing now is largely due to the demand-supply scenario, and is more accentuated in certain sectors such as financial services, retail, technology-enabled services, aviation and life sciences.

Indian corporations are increasingly looking at an extended global pool of candidates for leadership roles.

However, at a larger level, India is still not a first stop destination for topnotch global executive talent, and we are still some distance from being an active participant in the global cross-border interplay of talent in most sectors.

Due to the unprecedented and sustained growth there is an acute need to attract culturally competent business leaders to India from other parts of the world. But the biggest impediment today is the current size and scale of Indian businesses.

Most Indian corporations are still in the process of globalising their businesses and building size and scale. It would be unrealistic to expect Indian CXO compensation to be at par with global benchmarks at this point.

Global corporations establishing captive centres in India are also setting new benchmarks on local compensation. Though these benchmarks are significantly higher than local levels, still it offers them significant arbitrage operating out of India.

Total compensation, including base pay and variable performance pay, is largely a function of value delivered by the CXO. Historically, variable compensation in India has remained a small percentage of fixed or base pay with no significant upside.

In developed markets, variable pay by definition is non-linear, and in some cases, it is even 20-25 times of base pay. Going forward, we need to take a closer look on the overall design and structure of CXO compensation in India and incorporate measurable performance metrics.

The other significant aspect of CXO compensation in India is the huge disparity, which exists between promoter CXOs and professional CXOs. In the case of MNCs operating in India, there is a significant gap in compensation between expatriates serving in India and local managers.

Moving forward, as India Inc globalises and the business leadership becomes more diverse and multicultural, Indian corporations will have to compete on a global basis for talent.

Then we would see a systemic shift and perhaps we could imagine a situation where compensation levels in India would be at par with respective global industry benchmarks.

Rather than broadly addressing CXO compensation in dollar terms, the scenario will perhaps look different when the figures are adjusted for purchasing power parity and relative size of organisations.

Sanjeev Bikhchandani, chief executive officer, Naukri.com

 "Salaries are going up and since the economy's growing faster, the earning potential is higher - do an NPV of this, and you're better off here"

There are several aspects to be examined here - are Indian managers paid fairly, are they underpaid by international standards, and how is the situation likely to evolve over time.

The market for managerial talent in the private sector in India is reasonably free. There is minimal government intervention, companies compete for talent and people compete for jobs more or less in a free and fair manner. Most labour laws apply only to blue-collar workers. Managers can be hired or asked to go, more or less at will, by companies. Attrition rates are up.

So the fair or correct compensation for managerial talent is largely determined by market forces - the laws of demand and supply. If an Indian manager is paid what he is paid, it is because the market has determined that that is the fair and correct compensation. And that is how it should be.

But are Indian managers underpaid as compared to their contemporaries in other countries? Why you may ask is there such a gap between the salaries of those IIM graduates who get jobs in India and those who get jobs overseas? Why should the average IIM graduate get paid only Rs 900,000 for an Indian job (poor fellow), while a Gaurav Aggarwal gets $193,000 at Barclays in London?

Here you have to understand that London is a different market. It has its own tax structure, its own cost of living, its own situation of demand and supply of talent, and consequently, its salaries are different.

I am willing to wager that Gaurav Aggarwal will not be substantially better off financially than the highest-paid IIM graduate placed in India once you adjust for taxes, cost of living and the variable pay or bonus that is probably included in Aggarwal's package.

More importantly, the gap is narrowing over time. Increments, on the average, in India tend to be larger than those overseas. And because many companies are growing faster in India than in mature markets, managers get promoted to higher levels of responsibility faster, and consequently, get even higher increments.

What this means for an individual manager is that when you assess your earning potential over, say, the next five years and compute the net present value, you will probably be better off financially in India than overseas.

Sure if you restrict yourself to an exercise in comparative statics and take a simple point-to-point comparison you may get some immediate financial gains by going overseas.

Today, when I travel to Singapore and Hong Kong, I find that many of the Indian managers there yearn to come back because they perceive better career prospects in India because of the sheer size of the market and the growth in India. Ten years ago, those who were lucky enough to get a break in south-east Asia considered themselves very fortunate.