Shareholders May Be More Conservative With The Hi-Tech Gears Limited's (NSE:HITECHGEAR) CEO Compensation For Now

Key Insights

• Hi-Tech Gears to hold its Annual General Meeting on 28th of September
• CEO Pranav Kapuria's total compensation includes salary of ₹14.4m
• Total compensation is 250% above industry average
• Over the past three years, Hi-Tech Gears' EPS grew by 34% and over the past three years, the total shareholder return was 211%

Performance at The Hi-Tech Gears Limited (NSE:HITECHGEAR) has been reasonably good and CEO Pranav Kapuria has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 28th of September, 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 want to keep CEO compensation within reason.

Check out our latest analysis for Hi-Tech Gears

How Does Total Compensation For Pranav Kapuria Compare With Other Companies In The Industry?

According to our data, The Hi-Tech Gears Limited has a market capitalization of ₹7.1b, and paid its CEO total annual compensation worth ₹26m over the year to March 2023. That's a notable increase of 15% on last year. Notably, the salary which is ₹14.4m, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the Indian Auto Components industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹7.4m. This suggests that Pranav Kapuria is paid more than the median for the industry. What's more, Pranav Kapuria holds ₹320m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	₹14m	₹13m	55%
Other	₹12m	₹10m	45%
Total Compensation	₹26m	₹23m	100%

On an industry level, roughly 76% of total compensation represents salary and 24% is other remuneration. It's interesting to note that Hi-Tech Gears allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

The Hi-Tech Gears Limited's Growth

The Hi-Tech Gears Limited's earnings per share (EPS) grew 34% per year over the last three years. It achieved revenue growth of 8.2% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent 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 The Hi-Tech Gears Limited Been A Good Investment?

We think that the total shareholder return of 211%, over three years, would leave most The Hi-Tech Gears Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for Hi-Tech Gears you should be aware of, and 2 of them don't sit too well with us.

Important note: Hi-Tech Gears 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.