We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Shivam Autotech Limited's (NSE:SHIVAMAUTO) CEO For Now

CEO Neeraj Munjal has done a decent job of delivering relatively good performance at Shivam Autotech Limited (NSE:SHIVAMAUTO) recently. 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 28 September 2022. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Shivam Autotech

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

Our data indicates that Shivam Autotech Limited has a market capitalization of ₹4.9b, and total annual CEO compensation was reported as ₹19m for the year to March 2022. This was the same as last year. Notably, the salary which is ₹9.60m, represents a considerable chunk of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below ₹16b, we found that the median total CEO compensation was ₹11m. This suggests that Neeraj Munjal is paid more than the median for the industry.

Component	2022	2021	Proportion (2022)
Salary	₹9.6m	₹9.6m	51%
Other	₹9.2m	₹9.2m	49%
Total Compensation	₹19m	₹19m	100%

On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. In Shivam Autotech's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader 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.

A Look at Shivam Autotech Limited's Growth Numbers

Shivam Autotech Limited has seen its earnings per share (EPS) increase by 42% a year over the past three years. It saw its revenue drop 15% over the last 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Shivam Autotech Limited Been A Good Investment?

We think that the total shareholder return of 83%, over three years, would leave most Shivam Autotech 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...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are 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. That's why we did our research, and identified 4 warning signs for Shivam Autotech (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: Shivam Autotech 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.