It's Unlikely That MRF Limited's (NSE:MRF) CEO Will See A Huge Pay Rise This Year

Key Insights

• MRF will host its Annual General Meeting on 7th of August
• Total pay for CEO K. M. Mammen includes ₹190.2m salary
• The overall pay is 328% above the industry average
• MRF's EPS grew by 41% over the past three years while total shareholder return over the past three years was 67%

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Under the guidance of CEO K. M. Mammen, MRF Limited (NSE:MRF) has performed reasonably well recently. As shareholders go into the upcoming AGM on 7th of August, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for MRF

How Does Total Compensation For K. M. Mammen Compare With Other Companies In The Industry?

According to our data, MRF Limited has a market capitalization of ₹627b, and paid its CEO total annual compensation worth ₹321m over the year to March 2025. That's mostly flat as compared to the prior year's compensation. We note that the salary of ₹190.2m makes up a sizeable portion of the total compensation received by the CEO.

On examining similar-sized companies in the Indian Auto Components industry with market capitalizations between ₹351b and ₹1.1t, we discovered that the median CEO total compensation of that group was ₹75m. This suggests that K. M. Mammen is paid more than the median for the industry. What's more, K. M. Mammen holds ₹2.4b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 78% of total compensation represents salary and 22% is other remuneration. MRF sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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.

MRF Limited's Growth

MRF Limited has seen its earnings per share (EPS) increase by 41% a year over the past three years. Its revenue is up 12% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 MRF Limited Been A Good Investment?

We think that the total shareholder return of 67%, over three years, would leave most MRF 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.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

So you may want to check if insiders are buying MRF shares with their own money (free access).

Important note: MRF 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.