We Take A Look At Why Indian Bank's (NSE:INDIANB) CEO Has Earned Their Pay Packet

Key Insights

• Indian Bank will host its Annual General Meeting on 15th of June
• Salary of ₹2.60m is part of CEO Shanti Jain's total remuneration
• The overall pay is comparable to the industry average
• Indian Bank's total shareholder return over the past three years was 324% while its EPS grew by 31% over the past three years

The performance at Indian Bank (NSE:INDIANB) has been quite strong recently and CEO Shanti Jain has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 15th of June. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

View our latest analysis for Indian Bank

Comparing Indian Bank's CEO Compensation With The Industry

Our data indicates that Indian Bank has a market capitalization of ₹720b, and total annual CEO compensation was reported as ₹4.8m for the year to March 2024. We note that's an increase of 17% above last year. Notably, the salary which is ₹2.60m, represents a considerable chunk of the total compensation being paid.

On examining similar-sized companies in the Indian Banks industry with market capitalizations between ₹334b and ₹1.0t, we discovered that the median CEO total compensation of that group was ₹4.8m. This suggests that Indian Bank remunerates its CEO largely in line with the industry average. Moreover, Shanti Jain also holds ₹372k worth of Indian Bank stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹2.6m	₹2.5m	55%
Other	₹2.2m	₹1.6m	45%
Total Compensation	₹4.8m	₹4.1m	100%

Speaking on an industry level, nearly 60% of total compensation represents salary, while the remainder of 40% is other remuneration. Indian Bank is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Indian Bank's Growth

Indian Bank's earnings per share (EPS) grew 31% per year over the last three years. Its revenue is up 39% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Indian Bank Been A Good Investment?

Boasting a total shareholder return of 324% over three years, Indian Bank 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 in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Indian Bank that investors should think about before committing capital to this stock.

Important note: Indian Bank 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.