We Think Shareholders Will Probably Be Generous With Mahindra & Mahindra Limited's (NSE:M&M) CEO Compensation

Key Insights

• Mahindra & Mahindra to hold its Annual General Meeting on 31st of July
• CEO Anish Shah's total compensation includes salary of ₹146.2m
• The total compensation is similar to the average for the industry
• Over the past three years, Mahindra & Mahindra's EPS grew by 41% and over the past three years, the total shareholder return was 296%

The performance at Mahindra & Mahindra Limited (NSE:M&M) has been quite strong recently and CEO Anish Shah has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 31st of July. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

View our latest analysis for Mahindra & Mahindra

Comparing Mahindra & Mahindra Limited's CEO Compensation With The Industry

Our data indicates that Mahindra & Mahindra Limited has a market capitalization of ₹3.1t, and total annual CEO compensation was reported as ₹242m for the year to March 2024. Notably, that's an increase of 47% over the year before. Notably, the salary which is ₹146.2m, represents most of the total compensation being paid.

For comparison, other companies in the Indian Auto industry with market capitalizations above ₹670b, reported a median total CEO compensation of ₹242m. From this we gather that Anish Shah is paid around the median for CEOs in the industry. What's more, Anish Shah holds ₹352m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹146m	₹119m	60%
Other	₹96m	₹45m	40%
Total Compensation	₹242m	₹164m	100%

Speaking on an industry level, nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. There isn't a significant difference between Mahindra & Mahindra and the broader market, in terms of salary allocation in the overall compensation package. 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.

A Look at Mahindra & Mahindra Limited's Growth Numbers

Mahindra & Mahindra Limited has seen its earnings per share (EPS) increase by 41% a year over the past three years. It achieved revenue growth of 15% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Mahindra & Mahindra Limited Been A Good Investment?

Most shareholders would probably be pleased with Mahindra & Mahindra Limited for providing a total return of 296% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Mahindra & Mahindra (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

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