We Think The Compensation For Menon Bearings Limited's (NSE:MENONBE) CEO Looks About Right

Under the guidance of CEO Nitin Menon, Menon Bearings Limited (NSE:MENONBE) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 22 September 2022. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

View our latest analysis for Menon Bearings

How Does Total Compensation For Nitin Menon Compare With Other Companies In The Industry?

At the time of writing, our data shows that Menon Bearings Limited has a market capitalization of ₹6.9b, and reported total annual CEO compensation of ₹11m for the year to March 2022. Notably, that's a decrease of 13% over the year before. In particular, the salary of ₹10.7m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below ₹16b, reported a median total CEO compensation of ₹11m. From this we gather that Nitin Menon is paid around the median for CEOs in the industry. Furthermore, Nitin Menon directly owns ₹2.5b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	₹11m	₹12m	96%
Other	₹450k	₹401k	4%
Total Compensation	₹11m	₹13m	100%

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. Menon Bearings pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Menon Bearings Limited's Growth Numbers

Menon Bearings Limited has seen its earnings per share (EPS) increase by 5.5% a year over the past three years. It achieved revenue growth of 21% over the last year.

We would argue that the modest growth in revenue is a notable positive. And the modest growth in EPS isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Menon Bearings Limited Been A Good Investment?

We think that the total shareholder return of 117%, over three years, would leave most Menon Bearings Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Nitin receives almost all of their compensation through a salary. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

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 Menon Bearings that investors should be aware of in a dynamic business environment.

Important note: Menon Bearings 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.