Shareholders May Be Wary Of Increasing Omax Autos Limited's (NSE:OMAXAUTO) CEO Compensation Package

Shareholders will probably not be too impressed with the underwhelming results at Omax Autos Limited (NSE:OMAXAUTO) recently. At the upcoming AGM on 28 December 2021, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Omax Autos

How Does Total Compensation For Jatender Mehta Compare With Other Companies In The Industry?

According to our data, Omax Autos Limited has a market capitalization of ₹1.1b, and paid its CEO total annual compensation worth ₹13m over the year to March 2021. That's a notable decrease of 45% on last year. Notably, the salary which is ₹11.9m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹9.3m. Accordingly, our analysis reveals that Omax Autos Limited pays Jatender Mehta north of the industry median. What's more, Jatender Mehta holds ₹132m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	₹12m	₹23m	88%
Other	₹1.6m	₹1.6m	12%
Total Compensation	₹13m	₹25m	100%

Talking in terms of the industry, salary represented approximately 71% of total compensation out of all the companies we analyzed, while other remuneration made up 29% of the pie. Omax Autos is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Omax Autos Limited's Growth

Over the last three years, Omax Autos Limited has shrunk its earnings per share by 68% per year. Its revenue is down 36% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Omax Autos Limited Been A Good Investment?

With a total shareholder return of -38% over three years, Omax Autos Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Omax Autos that investors should look into moving forward.

Switching gears from Omax Autos, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.