Shareholders May Not Be So Generous With Omax Autos Limited's (NSE:OMAXAUTO) CEO Compensation And Here's Why

Key Insights

• Omax Autos will host its Annual General Meeting on 29th of August
• CEO Jatender Mehta's total compensation includes salary of ₹28.5m
• Total compensation is 363% above industry average
• Omax Autos' EPS grew by 1.7% over the past three years while total shareholder return over the past three years was 186%

Performance at Omax Autos Limited (NSE:OMAXAUTO) has been reasonably good and CEO Jatender Mehta has done a decent job of steering the company in the right direction. 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 29th of August. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Omax Autos

Comparing Omax Autos Limited's CEO Compensation With The Industry

According to our data, Omax Autos Limited has a market capitalization of ₹2.9b, and paid its CEO total annual compensation worth ₹28m over the year to March 2024. That's a modest increase of 3.3% on the prior year. Notably, the salary of ₹28m is the entirety of the CEO compensation.

For comparison, other companies in the Indian Auto Components industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹6.2m. Hence, we can conclude that Jatender Mehta is remunerated higher than the industry median. Furthermore, Jatender Mehta directly owns ₹350m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹28m	₹28m	100%
Other	-	-	-
Total Compensation	₹28m	₹28m	100%

On an industry level, around 74% of total compensation represents salary and 26% is other remuneration. On a company level, Omax Autos prefers to reward its CEO through a salary, opting not to pay Jatender Mehta through non-salary benefits. 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.

Omax Autos Limited's Growth

Omax Autos Limited has seen its earnings per share (EPS) increase by 1.7% a year over the past three years. In the last year, its revenue is up 22%.

We think the revenue growth is good. And the improvement in EPSis modest but respectable. Although we'll stop short of calling the stock a top performer, we think the company has potential. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Omax Autos Limited Been A Good Investment?

Most shareholders would probably be pleased with Omax Autos Limited for providing a total return of 186% over three years. 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...

Omax Autos rewards its CEO solely through a salary, ignoring non-salary benefits completely. 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. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 4 warning signs for Omax Autos (1 is concerning!) that you should be aware of before investing here.

Important note: Omax Autos 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.