It Looks Like Shareholders Would Probably Approve Ador Welding Limited's (NSE:ADORWELD) CEO Compensation Package

Key Insights

• Ador Welding will host its Annual General Meeting on 26th of July
• Salary of ₹15.5m is part of CEO Aditya Malkani's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Ador Welding's EPS grew by 58% and over the past three years, the total shareholder return was 96%

The performance at Ador Welding Limited (NSE:ADORWELD) has been quite strong recently and CEO Aditya Malkani has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 26th of July. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

See our latest analysis for Ador Welding

How Does Total Compensation For Aditya Malkani Compare With Other Companies In The Industry?

According to our data, Ador Welding Limited has a market capitalization of ₹19b, and paid its CEO total annual compensation worth ₹17m over the year to March 2024. That's a notable increase of 18% on last year. Notably, the salary which is ₹15.5m, represents most of the total compensation being paid.

On examining similar-sized companies in the Indian Machinery industry with market capitalizations between ₹8.4b and ₹33b, we discovered that the median CEO total compensation of that group was ₹15m. From this we gather that Aditya Malkani is paid around the median for CEOs in the industry. Moreover, Aditya Malkani also holds ₹203m worth of Ador Welding 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	₹13m	91%
Other	₹1.6m	₹1.4m	9%
Total Compensation	₹17m	₹15m	100%

Talking in terms of the industry, salary represented approximately 92% of total compensation out of all the companies we analyzed, while other remuneration made up 8% of the pie. Our data reveals that Ador Welding allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Ador Welding Limited's Growth Numbers

Ador Welding Limited's earnings per share (EPS) grew 58% per year over the last three years. In the last year, its revenue is up 14%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Ador Welding Limited Been A Good Investment?

Most shareholders would probably be pleased with Ador Welding Limited for providing a total return of 96% over three years. 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. 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 an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for Ador Welding (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Ador Welding, 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.

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