Why We Think Suryoday Small Finance Bank Limited's (NSE:SURYODAY) CEO Compensation Is Not Excessive At All

Key Insights

• Suryoday Small Finance Bank will host its Annual General Meeting on 12th of September
• CEO Baskar Ramachandran's total compensation includes salary of ₹16.2m
• The overall pay is comparable to the industry average
• Over the past three years, Suryoday Small Finance Bank's EPS grew by 115% and over the past three years, the total shareholder return was 25%

CEO Baskar Ramachandran has done a decent job of delivering relatively good performance at Suryoday Small Finance Bank Limited (NSE:SURYODAY) 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 12th of September. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

Check out our latest analysis for Suryoday Small Finance Bank

Comparing Suryoday Small Finance Bank Limited's CEO Compensation With The Industry

According to our data, Suryoday Small Finance Bank Limited has a market capitalization of ₹20b, and paid its CEO total annual compensation worth ₹18m over the year to March 2024. Notably, that's an increase of 10.0% over the year before. We note that the salary portion, which stands at ₹16.2m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the Indian Banks industry with market capitalizations between ₹8.4b and ₹34b, we discovered that the median CEO total compensation of that group was ₹18m. From this we gather that Baskar Ramachandran is paid around the median for CEOs in the industry. Moreover, Baskar Ramachandran also holds ₹1b worth of Suryoday Small Finance 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	₹16m	₹15m	92%
Other	₹1.4m	₹1.2m	8%
Total Compensation	₹18m	₹16m	100%

On an industry level, around 72% of total compensation represents salary and 28% is other remuneration. According to our research, Suryoday Small Finance Bank has allocated a higher percentage of pay to salary in comparison to the wider 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.

Suryoday Small Finance Bank Limited's Growth

Suryoday Small Finance Bank Limited's earnings per share (EPS) grew 115% per year over the last three years. It achieved revenue growth of 56% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Suryoday Small Finance Bank Limited Been A Good Investment?

Suryoday Small Finance Bank Limited has generated a total shareholder return of 25% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

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. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Suryoday Small Finance Bank that investors should think about before committing capital to this stock.

Switching gears from Suryoday Small Finance Bank, 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.