We Think The Compensation For Jamna Auto Industries Limited's (NSE:JAMNAAUTO) CEO Looks About Right

Performance at Jamna Auto Industries Limited (NSE:JAMNAAUTO) has been reasonably good and CEO Pradeep Jauhar has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 22 September 2021. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for Jamna Auto Industries

How Does Total Compensation For Pradeep Jauhar Compare With Other Companies In The Industry?

According to our data, Jamna Auto Industries Limited has a market capitalization of ₹36b, and paid its CEO total annual compensation worth ₹25m over the year to March 2021. That's just a smallish increase of 5.8% on last year. We note that the salary portion, which stands at ₹17.2m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from ₹15b to ₹59b, we found that the median CEO total compensation was ₹21m. From this we gather that Pradeep Jauhar is paid around the median for CEOs in the industry. Moreover, Pradeep Jauhar also holds ₹2.1b worth of Jamna Auto Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	₹17m	₹19m	68%
Other	₹8.2m	₹4.8m	32%
Total Compensation	₹25m	₹24m	100%

Speaking on an industry level, nearly 74% of total compensation represents salary, while the remainder of 26% is other remuneration. Our data reveals that Jamna Auto Industries allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Jamna Auto Industries Limited's Growth

Over the last three years, Jamna Auto Industries Limited has shrunk its earnings per share by 11% per year. Its revenue is up 69% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Jamna Auto Industries Limited Been A Good Investment?

With a total shareholder return of 16% over three years, Jamna Auto Industries Limited shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

The overall company performance has been commendable, however there are still areas for improvement. Despite robust revenue growth, until EPS growth improves, shareholders may be hesitant to increase CEO pay by too much.

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 Jamna Auto Industries that investors should look into moving forward.

Switching gears from Jamna Auto Industries, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.
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