We Discuss Why The CEO Of JTEKT India Limited (NSE:JTEKTINDIA) Is Due For A Pay Rise

Key Insights

• JTEKT India to hold its Annual General Meeting on 13th of August
• Total pay for CEO Hitoshi Mogi includes ₹6.60m salary
• The overall pay is 65% below the industry average
• JTEKT India's EPS grew by 27% over the past three years while total shareholder return over the past three years was 68%

The impressive results at JTEKT India Limited (NSE:JTEKTINDIA) recently will be great news for shareholders. This would be kept in mind at the upcoming AGM on 13th 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. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

Check out our latest analysis for JTEKT India

Comparing JTEKT India Limited's CEO Compensation With The Industry

According to our data, JTEKT India Limited has a market capitalization of ₹46b, and paid its CEO total annual compensation worth ₹9.0m over the year to March 2024. That's a modest increase of 5.2% on the prior year. In particular, the salary of ₹6.60m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Indian Auto Components industry with market capitalizations ranging from ₹17b to ₹67b, the reported median CEO total compensation was ₹26m. In other words, JTEKT India pays its CEO lower than the industry median.

Component	2024	2023	Proportion (2024)
Salary	₹6.6m	₹6.6m	73%
Other	₹2.4m	₹2.0m	27%
Total Compensation	₹9.0m	₹8.6m	100%

On an industry level, around 74% of total compensation represents salary and 26% is other remuneration. Although there is a difference in how total compensation is set, JTEKT India more or less reflects the market in terms of setting the 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 JTEKT India Limited's Growth Numbers

JTEKT India Limited has seen its earnings per share (EPS) increase by 27% a year over the past three years. It achieved revenue growth of 13% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has JTEKT India Limited Been A Good Investment?

We think that the total shareholder return of 68%, over three years, would leave most JTEKT India 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...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for JTEKT India that investors should be aware of in a dynamic business environment.

Important note: JTEKT India 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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