The moment I read about the Insurance Regulator in India, IRDAI, proposing to link CEO compensation with customer outcomes, I felt it carried a lesson far beyond the insurance industry.

It is easy to dismiss this as just another regulatory move for a tightly governed sector. That would be a mistake. What IRDAI is signalling is something much deeper: the era where executive rewards could stay disconnected from customer experience due to market dominance or technology moat may be coming to an end.

The proposal reportedly links CEO and executive pay to measurable customer outcomes such as claim settlement speed, grievance handling, transparency, and service quality. Customer experience is expected to become a core factor in leadership evaluation, not just another operational metric. Public disclosure of such compensation structures could add another layer of accountability.

Founder CEOs should pay attention.

Not because regulation will spread tomorrow to every industry. But because the underlying mood in markets, employees, and customers is already changing.

Inside companies today, employees are carrying a quiet anxiety. AI is reshaping job roles. Geopolitical uncertainty continues to affect industries unevenly. Teams are being asked to adapt faster than ever before. At the same time, they see headlines announcing rising executive compensation, bonuses, stock buybacks, and promoter wealth creation.

Even when business performance justifies it, perception matters.

Employees do not merely evaluate salary fairness anymore. They increasingly evaluate whether leadership appears emotionally aligned with the realities facing the workforce. A founder who appears disconnected from customer pain or employee uncertainty risks weakening the invisible layer of trust that holds organisations together.

The second shift is happening externally.

As AI systems increasingly handle customer service, support tickets, onboarding, and grievance management, customers are beginning to feel a growing emotional distance from brands. Most of the time, this automation works reasonably well. But when something goes wrong, frustration escalates rapidly.

And in today’s social media environment, small frustrations rarely remain small.

A delayed refund, a failed service interaction, or a poorly handled support issue can quickly become public theatre. When customers simultaneously see headlines about soaring executive compensation or aggressive profit extraction, resentment builds faster. Switching brands becomes emotionally easier.

This is where IRDAI’s proposal becomes strategically interesting.

It reminds us that leadership compensation is no longer viewed purely as an internal governance matter. It is increasingly becoming a public signal of what a company values.

In many ways, this shift was already underway globally.

The Deloitte India Executive Performance and Rewards Survey 2025 observed that nearly 60% of CEO compensation in India is now performance-linked, with companies increasingly tying incentives not just to financial targets but also broader operational and strategic outcomes. What IRDAI appears to be doing differently is placing direct customer outcomes at the centre of executive accountability.

This connects strongly with a chapter from my book The Founder Catalyst, titled “Build Like a Politician.”

The argument in that chapter is simple. Politicians survive not merely through performance metrics, but through perception, emotional connection, responsiveness, and continuous signalling that they are listening. Customers and employees increasingly evaluate companies the same way.

Founders often assume products, pricing, or technology alone create loyalty. They do not. Trust does.

And trust is built when stakeholders believe leadership shares accountability for outcomes, especially during difficult moments.

This does not mean founders should avoid wealth creation or executive rewards. Founders take enormous risks and deserve financial success when businesses perform well. But leadership compensation today carries symbolic meaning beyond accounting entries.

A founder CEO is no longer judged only by growth rates or valuations. Leadership behaviour itself has become part of the product experience.