Shareholders Will Probably Hold Off On Increasing Balkrishna Industries Limited's (NSE:BALKRISIND) CEO Compensation For The Time Being

Key Insights

• Balkrishna Industries will host its Annual General Meeting on 19th of July
• Salary of ₹30.0m is part of CEO Arvind Kumar Poddar's total remuneration
• Total compensation is 111% above industry average
• Balkrishna Industries' total shareholder return over the past three years was 35% while its EPS grew by 7.7% over the past three years

CEO Arvind Kumar Poddar has done a decent job of delivering relatively good performance at Balkrishna Industries Limited (NSE:BALKRISIND) recently. As shareholders go into the upcoming AGM on 19th of July, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Balkrishna Industries

Comparing Balkrishna Industries Limited's CEO Compensation With The Industry

Our data indicates that Balkrishna Industries Limited has a market capitalization of ₹604b, and total annual CEO compensation was reported as ₹423m for the year to March 2024. Notably, that's an increase of 9.7% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹30m.

On comparing similar companies from the Indian Auto Components industry with market caps ranging from ₹334b to ₹1.0t, we found that the median CEO total compensation was ₹200m. Accordingly, our analysis reveals that Balkrishna Industries Limited pays Arvind Kumar Poddar north of the industry median. What's more, Arvind Kumar Poddar holds ₹24b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹30m	₹30m	7%
Other	₹393m	₹355m	93%
Total Compensation	₹423m	₹385m	100%

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. Balkrishna Industries sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Balkrishna Industries Limited's Growth Numbers

Over the past three years, Balkrishna Industries Limited has seen its earnings per share (EPS) grow by 7.7% per year. Its revenue is down 4.0% over the previous year.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Balkrishna Industries Limited Been A Good Investment?

Boasting a total shareholder return of 35% over three years, Balkrishna Industries Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Balkrishna Industries that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com