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

Key Insights

• Suprajit Engineering will host its Annual General Meeting on 25th of September
• CEO Mohan Nagamangala's total compensation includes salary of ₹18.1m
• The overall pay is 42% below the industry average
• Suprajit Engineering's total shareholder return over the past three years was 141% while its EPS grew by 35% over the past three years

The solid performance at Suprajit Engineering Limited (NSE:SUPRAJIT) has been impressive and shareholders will probably be pleased to know that CEO Mohan Nagamangala has delivered. This would be kept in mind at the upcoming AGM on 25th of September which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

Check out our latest analysis for Suprajit Engineering

Comparing Suprajit Engineering Limited's CEO Compensation With The Industry

Our data indicates that Suprajit Engineering Limited has a market capitalization of ₹58b, and total annual CEO compensation was reported as ₹26m for the year to March 2023. That's a notable increase of 22% on last year. In particular, the salary of ₹18.1m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the Indian Auto Components industry with market capitalizations between ₹33b and ₹133b, we discovered that the median CEO total compensation of that group was ₹45m. This suggests that Mohan Nagamangala is paid below the industry median.

Component	2023	2022	Proportion (2023)
Salary	₹18m	₹15m	70%
Other	₹7.6m	₹6.4m	30%
Total Compensation	₹26m	₹21m	100%

Talking in terms of the industry, salary represented approximately 76% of total compensation out of all the companies we analyzed, while other remuneration made up 24% of the pie. There isn't a significant difference between Suprajit Engineering and the broader market, in terms of salary allocation in the overall compensation package. 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 Suprajit Engineering Limited's Growth Numbers

Suprajit Engineering Limited has seen its earnings per share (EPS) increase by 35% a year over the past three years. In the last year, its revenue is up 31%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Suprajit Engineering Limited Been A Good Investment?

Boasting a total shareholder return of 141% over three years, Suprajit Engineering 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...

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.

Whatever your view on compensation, you might want to check if insiders are buying or selling Suprajit Engineering shares (free trial).

Switching gears from Suprajit Engineering, 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.