Why We Think The CEO Of Suprajit Engineering Limited (NSE:SUPRAJIT) May Soon See A Pay Rise

The impressive results at Suprajit Engineering Limited (NSE:SUPRAJIT) recently will be great news for shareholders. At the upcoming AGM on 03 September 2021, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

Check out our latest analysis for Suprajit Engineering

Comparing Suprajit Engineering Limited's CEO Compensation With the industry

According to our data, Suprajit Engineering Limited has a market capitalization of ₹45b, and paid its CEO total annual compensation worth ₹15m over the year to March 2021. We note that's a decrease of 18% compared to last year. We note that the salary portion, which stands at ₹14.2m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from ₹30b to ₹119b, we found that the median CEO total compensation was ₹26m. That is to say, Mohan Nagamangala is paid under the industry median. Furthermore, Mohan Nagamangala directly owns ₹2.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	₹14m	₹13m	92%
Other	₹1.2m	₹5.4m	8%
Total Compensation	₹15m	₹19m	100%

On an industry level, around 76% of total compensation represents salary and 24% is other remuneration. According to our research, Suprajit Engineering has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Suprajit Engineering Limited's Growth Numbers

Suprajit Engineering Limited has seen its earnings per share (EPS) increase by 11% a year over the past three years. Its revenue is up 33% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Suprajit Engineering Limited Been A Good Investment?

We think that the total shareholder return of 37%, over three years, would leave most Suprajit Engineering 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...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Suprajit Engineering (free visualization of insider trades).

Important note: Suprajit Engineering 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.
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