It's Unlikely That Sona BLW Precision Forgings Limited's (NSE:SONACOMS) CEO Will See A Huge Pay Rise This Year

Key Insights

• Sona BLW Precision Forgings will host its Annual General Meeting on 28th of June
• Total pay for CEO Vivek Singh includes ₹19.6m salary
• The total compensation is 144% higher than the average for the industry
• Sona BLW Precision Forgings' EPS grew by 33% over the past three years while total shareholder return over the past three years was 75%

Performance at Sona BLW Precision Forgings Limited (NSE:SONACOMS) has been reasonably good and CEO Vivek Singh 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 28th of June. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Sona BLW Precision Forgings

Comparing Sona BLW Precision Forgings Limited's CEO Compensation With The Industry

Our data indicates that Sona BLW Precision Forgings Limited has a market capitalization of ₹369b, and total annual CEO compensation was reported as ₹143m for the year to March 2024. That's a notable increase of 15% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹20m.

For comparison, other companies in the Indian Auto Components industry with market capitalizations ranging between ₹167b and ₹535b had a median total CEO compensation of ₹59m. Accordingly, our analysis reveals that Sona BLW Precision Forgings Limited pays Vivek Singh north of the industry median. What's more, Vivek Singh holds ₹139m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹20m	₹20m	14%
Other	₹124m	₹104m	86%
Total Compensation	₹143m	₹125m	100%

Talking in terms of the industry, salary represented approximately 72% of total compensation out of all the companies we analyzed, while other remuneration made up 28% of the pie. Sona BLW Precision Forgings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Sona BLW Precision Forgings Limited's Growth Numbers

Over the past three years, Sona BLW Precision Forgings Limited has seen its earnings per share (EPS) grow by 33% per year. It achieved revenue growth of 20% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Sona BLW Precision Forgings Limited Been A Good Investment?

Boasting a total shareholder return of 75% over three years, Sona BLW Precision Forgings 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...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Sona BLW Precision Forgings that investors should think about before committing capital to this stock.

Switching gears from Sona BLW Precision Forgings, 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.

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