We Take A Look At Whether GRP Limited's (NSE:GRPLTD) CEO May Be Underpaid

Key Insights

• GRP to hold its Annual General Meeting on 2nd of August
• CEO Rajendra Gandhi's total compensation includes salary of ₹8.40m
• The total compensation is 65% less than the average for the industry
• GRP's total shareholder return over the past three years was 1,543% while its EPS grew by 138% over the past three years

The impressive results at GRP Limited (NSE:GRPLTD) recently will be great news for shareholders. This would be kept in mind at the upcoming AGM on 2nd of August which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

Check out our latest analysis for GRP

How Does Total Compensation For Rajendra Gandhi Compare With Other Companies In The Industry?

Our data indicates that GRP Limited has a market capitalization of ₹20b, and total annual CEO compensation was reported as ₹9.6m for the year to March 2024. This was the same as last year. In particular, the salary of ₹8.40m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the Indian Auto Components industry with market caps ranging from ₹8.4b to ₹33b, we found that the median CEO total compensation was ₹27m. That is to say, Rajendra Gandhi is paid under the industry median. Furthermore, Rajendra Gandhi directly owns ₹1.3b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹8.4m	₹8.4m	88%
Other	₹1.2m	₹1.2m	12%
Total Compensation	₹9.6m	₹9.6m	100%

Talking in terms of the industry, salary represented approximately 75% of total compensation out of all the companies we analyzed, while other remuneration made up 25% of the pie. GRP pays out 88% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at GRP Limited's Growth Numbers

GRP Limited has seen its earnings per share (EPS) increase by 138% a year over the past three years. It achieved revenue growth of 2.3% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has GRP Limited Been A Good Investment?

We think that the total shareholder return of 1,543%, over three years, would leave most GRP Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for GRP you should be aware of, and 2 of them shouldn't be ignored.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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