Most Shareholders Will Probably Find That The CEO Compensation For G N A Axles Limited (NSE:GNA) Is Reasonable

Key Insights

• G N A Axles will host its Annual General Meeting on 19th of September
• Total pay for CEO Ranbir Seehra includes ₹28.5m salary
• Total compensation is similar to the industry average
• G N A Axles' EPS declined by 3.9% over the past three years while total shareholder return over the past three years was 6.9%

Despite positive share price growth of 6.9% for G N A Axles Limited (NSE:GNA) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 19th of September may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for G N A Axles

How Does Total Compensation For Ranbir Seehra Compare With Other Companies In The Industry?

At the time of writing, our data shows that G N A Axles Limited has a market capitalization of ₹19b, and reported total annual CEO compensation of ₹28m for the year to March 2024. We note that's a decrease of 9.4% compared to last year. Notably, the salary of ₹28m is the entirety of the CEO compensation.

On examining similar-sized companies in the Indian Auto Components industry with market capitalizations between ₹8.4b and ₹34b, we discovered that the median CEO total compensation of that group was ₹28m. This suggests that G N A Axles remunerates its CEO largely in line with the industry average. Moreover, Ranbir Seehra also holds ₹2.8b worth of G N A Axles stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹28m	₹31m	100%
Other	-	-	-
Total Compensation	₹28m	₹31m	100%

On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. Speaking on a company level, G N A Axles prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at G N A Axles Limited's Growth Numbers

G N A Axles Limited has reduced its earnings per share by 3.9% a year over the last three years. It saw its revenue drop 3.2% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has G N A Axles Limited Been A Good Investment?

G N A Axles Limited has not done too badly by shareholders, with a total return of 6.9%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

G N A Axles pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for G N A Axles that investors should look into moving forward.

Important note: G N A Axles is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.