Shareholders May Be More Conservative With Amara Raja Energy & Mobility Limited's (NSE:ARE&M) CEO Compensation For Now

Key Insights

• Amara Raja Energy & Mobility's Annual General Meeting to take place on 3rd of August
• Total pay for CEO Jay Galla includes ₹24.0m salary
• The overall pay is 721% above the industry average
• Amara Raja Energy & Mobility's total shareholder return over the past three years was 140% while its EPS grew by 10% over the past three years

Under the guidance of CEO Jay Galla, Amara Raja Energy & Mobility Limited (NSE:ARE&M) has performed reasonably well recently. As shareholders go into the upcoming AGM on 3rd 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 will still be cautious of paying the CEO excessively.

Check out 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 ₹308b, and total annual CEO compensation was reported as ₹633m for the year to March 2024. We note that's an increase of 20% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹24m.

On examining similar-sized companies in the Indian Electrical industry with market capitalizations between ₹167b and ₹536b, we discovered that the median CEO total compensation of that group was ₹77m. Accordingly, our analysis reveals that Amara Raja Energy & Mobility Limited pays Jay Galla north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	₹24m	₹24m	4%
Other	₹609m	₹502m	96%
Total Compensation	₹633m	₹526m	100%

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. Investors may find it interesting that Amara Raja Energy & Mobility paid a marginal salary to Jay Galla, over the past year, focusing on non-salary compensation instead. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Amara Raja Energy & Mobility Limited's Growth Numbers

Amara Raja Energy & Mobility Limited's earnings per share (EPS) grew 10% per year over the last three years. It achieved revenue growth of 13% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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?

We think that the total shareholder return of 140%, over three years, would leave most Amara Raja Energy & Mobility Limited shareholders smiling. 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. 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. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Amara Raja Energy & Mobility that investors should think about before committing capital to this stock.

Switching gears from Amara Raja Energy & Mobility, 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