Here's Why Shareholders May Want To Be Cautious With Increasing Amara Raja Energy & Mobility Limited's (NSE:ARE&M) CEO Pay Packet

Key Insights

• Amara Raja Energy & Mobility's Annual General Meeting to take place on 14th of August
• Total pay for CEO Jay Galla includes ₹24.0m salary
• Total compensation is 845% above industry average
• Amara Raja Energy & Mobility's EPS grew by 20% over the past three years while total shareholder return over the past three years was 87%

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Performance at Amara Raja Energy & Mobility Limited (NSE:ARE&M) has been reasonably good and CEO Jay Galla has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 14th of August, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Amara Raja Energy & Mobility

How Does Total Compensation For Jay Galla Compare With Other Companies In The Industry?

Our data indicates that Amara Raja Energy & Mobility Limited has a market capitalization of ₹172b, and total annual CEO compensation was reported as ₹673m for the year to March 2025. That's a fairly small increase of 6.3% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹24m.

On examining similar-sized companies in the Indian Electrical industry with market capitalizations between ₹88b and ₹280b, we discovered that the median CEO total compensation of that group was ₹71m. Hence, we can conclude that Jay Galla is remunerated higher than the industry median.

Speaking on an industry level, nearly 83% of total compensation represents salary, while the remainder of 17% is other remuneration. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to Jay Galla as compared to non-salary compensation over the one-year period examined. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Amara Raja Energy & Mobility Limited's Growth

Amara Raja Energy & Mobility Limited has seen its earnings per share (EPS) increase by 20% a year over the past three years. In the last year, its revenue is up 9.7%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Amara Raja Energy & Mobility Limited Been A Good Investment?

Most shareholders would probably be pleased with Amara Raja Energy & Mobility Limited for providing a total return of 87% 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.

In Summary...

Amara Raja Energy & Mobility primarily uses non-salary benefits to reward its CEO. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Amara Raja Energy & Mobility that you should be aware of before investing.

Important note: Amara Raja Energy & Mobility 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.