We Think Some Shareholders May Hesitate To Increase Cera Sanitaryware Limited's (NSE:CERA) CEO Compensation

Key Insights

• Cera Sanitaryware's Annual General Meeting to take place on 11th of July
• CEO Vikram Somany's total compensation includes salary of ₹75.1m
• The overall pay is 212% above the industry average
• Over the past three years, Cera Sanitaryware's EPS grew by 33% and over the past three years, the total shareholder return was 108%

Performance at Cera Sanitaryware Limited (NSE:CERA) has been reasonably good and CEO Vikram Somany has done a decent job of steering the company in the right direction. 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 11th of July. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Cera Sanitaryware

How Does Total Compensation For Vikram Somany Compare With Other Companies In The Industry?

According to our data, Cera Sanitaryware Limited has a market capitalization of ₹117b, and paid its CEO total annual compensation worth ₹84m over the year to March 2024. That's a notable increase of 12% on last year. We note that the salary portion, which stands at ₹75.1m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Indian Building industry with market capitalizations ranging between ₹83b and ₹267b had a median total CEO compensation of ₹27m. Accordingly, our analysis reveals that Cera Sanitaryware Limited pays Vikram Somany north of the industry median. What's more, Vikram Somany holds ₹21b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹75m	₹67m	89%
Other	₹9.1m	₹8.3m	11%
Total Compensation	₹84m	₹76m	100%

Speaking on an industry level, nearly 92% of total compensation represents salary, while the remainder of 8% is other remuneration. There isn't a significant difference between Cera Sanitaryware and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Cera Sanitaryware Limited's Growth Numbers

Cera Sanitaryware Limited has seen its earnings per share (EPS) increase by 33% a year over the past three years. In the last year, its revenue is up 3.8%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Cera Sanitaryware Limited Been A Good Investment?

Boasting a total shareholder return of 108% over three years, Cera Sanitaryware 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.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Cera Sanitaryware (free visualization of insider trades).

Switching gears from Cera Sanitaryware, 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