Increases to Munjal Auto Industries Limited's (NSE:MUNJALAU) CEO Compensation Might Cool off for now

Key Insights

• Munjal Auto Industries to hold its Annual General Meeting on 25th of August
• Salary of ₹33.6m is part of CEO Sudhir Kumar Munjal's total remuneration
• The total compensation is 639% higher than the average for the industry
• Over the past three years, Munjal Auto Industries' EPS fell by 16% and over the past three years, the total shareholder return was 66%

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The share price of Munjal Auto Industries Limited (NSE:MUNJALAU) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 25th of August. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

See our latest analysis for Munjal Auto Industries

How Does Total Compensation For Sudhir Kumar Munjal Compare With Other Companies In The Industry?

At the time of writing, our data shows that Munjal Auto Industries Limited has a market capitalization of ₹7.5b, and reported total annual CEO compensation of ₹76m for the year to March 2025. That's a notable increase of 40% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹34m.

On comparing similar-sized companies in the Indian Auto Components industry with market capitalizations below ₹17b, we found that the median total CEO compensation was ₹10m. Hence, we can conclude that Sudhir Kumar Munjal is remunerated higher than the industry median.

On an industry level, roughly 78% of total compensation represents salary and 22% is other remuneration. Munjal Auto Industries pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Munjal Auto Industries Limited's Growth

Over the last three years, Munjal Auto Industries Limited has shrunk its earnings per share by 16% per year. It achieved revenue growth of 8.7% over the last year.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Munjal Auto Industries Limited Been A Good Investment?

Boasting a total shareholder return of 66% over three years, Munjal Auto Industries Limited has done well by shareholders. 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.

To Conclude...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Munjal Auto Industries you should be aware of, and 1 of them can't be ignored.

Important note: Munjal Auto Industries 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.