The Compensation For Rane (Madras) Limited's (NSE:RML) CEO Looks Deserved And Here's Why

Key Insights

• Rane (Madras)'s Annual General Meeting to take place on 24th of July
• CEO Gowri Kailasam's total compensation includes salary of ₹18.3m
• The total compensation is similar to the average for the industry
• Rane (Madras)'s total shareholder return over the past three years was 127% while its EPS grew by 96% over the past three years

The performance at Rane (Madras) Limited (NSE:RML) has been quite strong recently and CEO Gowri Kailasam has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 24th of July. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

See our latest analysis for Rane (Madras)

Comparing Rane (Madras) Limited's CEO Compensation With The Industry

According to our data, Rane (Madras) Limited has a market capitalization of ₹15b, and paid its CEO total annual compensation worth ₹18m over the year to March 2024. We note that's an increase of 20% above last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹18m.

For comparison, other companies in the Indian Auto Components industry with market capitalizations ranging between ₹8.4b and ₹33b had a median total CEO compensation of ₹26m. This suggests that Rane (Madras) remunerates its CEO largely in line with the industry average.

Component	2024	2023	Proportion (2024)
Salary	₹18m	₹15m	100%
Other	-	-	-
Total Compensation	₹18m	₹15m	100%

On an industry level, roughly 77% of total compensation represents salary and 23% is other remuneration. At the company level, Rane (Madras) pays Gowri Kailasam solely through a salary, preferring to go down a conventional route. 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.

Rane (Madras) Limited's Growth

Rane (Madras) Limited's earnings per share (EPS) grew 96% per year over the last three years. Its revenue is down 4.9% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Rane (Madras) Limited Been A Good Investment?

Most shareholders would probably be pleased with Rane (Madras) Limited for providing a total return of 127% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Rane (Madras) pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

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. That's why we did our research, and identified 3 warning signs for Rane (Madras) (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Rane (Madras), 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.

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