We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Jay Bharat Maruti Limited's (NSE:JAYBARMARU) CEO For Now

As many shareholders of Jay Bharat Maruti Limited (NSE:JAYBARMARU) will be aware, they have not made a gain on their investment in the past three years. Per share earnings growth is also poor, despite revenues growing. The AGM coming up on 27 September 2021 will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

View our latest analysis for Jay Bharat Maruti

How Does Total Compensation For Surendra Arya Compare With Other Companies In The Industry?

At the time of writing, our data shows that Jay Bharat Maruti Limited has a market capitalization of ₹7.9b, and reported total annual CEO compensation of ₹34m for the year to March 2021. Notably, that's an increase of 15% over the year before. In particular, the salary of ₹32.4m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹7.9m. Accordingly, our analysis reveals that Jay Bharat Maruti Limited pays Surendra Arya north of the industry median. Furthermore, Surendra Arya directly owns ₹114m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	₹32m	₹28m	94%
Other	₹2.0m	₹2.2m	6%
Total Compensation	₹34m	₹30m	100%

Talking in terms of the industry, salary represented approximately 74% of total compensation out of all the companies we analyzed, while other remuneration made up 26% of the pie. It's interesting to note that Jay Bharat Maruti pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Jay Bharat Maruti Limited's Growth

Jay Bharat Maruti Limited has reduced its earnings per share by 6.8% a year over the last three years. Its revenue is up 43% over the last year.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Jay Bharat Maruti Limited Been A Good Investment?

Given the total shareholder loss of 1.6% over three years, many shareholders in Jay Bharat Maruti Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 4 warning signs (and 1 which is significant) in Jay Bharat Maruti we think you should know about.

Important note: Jay Bharat Maruti 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.
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