Why We Think The CEO Of 3M India Limited (NSE:3MINDIA) May Soon See A Pay Rise

Key Insights

• 3M India to hold its Annual General Meeting on 7th of August
• Salary of ₹36.1m is part of CEO Ramesh Ramadurai's total remuneration
• The overall pay is 80% below the industry average
• 3M India's total shareholder return over the past three years was 71% while its EPS grew by 53% over the past three years

Shareholders will be pleased by the impressive results for 3M India Limited (NSE:3MINDIA) recently and CEO Ramesh Ramadurai has played a key role. This would be kept in mind at the upcoming AGM on 7th of August 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. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

See our latest analysis for 3M India

How Does Total Compensation For Ramesh Ramadurai Compare With Other Companies In The Industry?

At the time of writing, our data shows that 3M India Limited has a market capitalization of ₹443b, and reported total annual CEO compensation of ₹38m for the year to March 2024. That's a modest increase of 5.5% on the prior year. In particular, the salary of ₹36.1m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the India Industrials industry with market caps ranging from ₹335b to ₹1.0t, we found that the median CEO total compensation was ₹186m. This suggests that Ramesh Ramadurai is paid below the industry median.

Component	2024	2023	Proportion (2024)
Salary	₹36m	₹34m	95%
Other	₹1.9m	₹2.0m	5%
Total Compensation	₹38m	₹36m	100%

On an industry level, around 85% of total compensation represents salary and 15% is other remuneration. It's interesting to note that 3M India pays out a greater portion of remuneration through salary, compared to the 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.

A Look at 3M India Limited's Growth Numbers

3M India Limited has seen its earnings per share (EPS) increase by 53% a year over the past three years. It achieved revenue growth of 5.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has 3M India Limited Been A Good Investment?

Boasting a total shareholder return of 71% over three years, 3M India Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in 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 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 3M India that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com