We Discuss Why The CEO Of Cochin Shipyard Limited (NSE:COCHINSHIP) Is Due For A Pay Rise

Key Insights

• Cochin Shipyard's Annual General Meeting to take place on 30th of September
• CEO Madhu Nair's total compensation includes salary of ₹6.69m
• The overall pay is 86% below the industry average
• Cochin Shipyard's EPS grew by 13% over the past three years while total shareholder return over the past three years was 1,023%

The impressive results at Cochin Shipyard Limited (NSE:COCHINSHIP) recently will be great news for shareholders. At the upcoming AGM on 30th of September, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

Check out our latest analysis for Cochin Shipyard

How Does Total Compensation For Madhu Nair Compare With Other Companies In The Industry?

According to our data, Cochin Shipyard Limited has a market capitalization of ₹486b, and paid its CEO total annual compensation worth ₹9.0m over the year to March 2024. We note that's an increase of 8.2% above last year. Notably, the salary which is ₹6.69m, represents most of the total compensation being paid.

On examining similar-sized companies in the Indian Machinery industry with market capitalizations between ₹334b and ₹1.0t, we discovered that the median CEO total compensation of that group was ₹63m. That is to say, Madhu Nair is paid under the industry median. What's more, Madhu Nair holds ₹5.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 91% of total compensation represents salary and 9% is other remuneration. In Cochin Shipyard's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Cochin Shipyard Limited's Growth

Over the past three years, Cochin Shipyard Limited has seen its earnings per share (EPS) grow by 13% per year. In the last year, its revenue is up 72%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Cochin Shipyard Limited Been A Good Investment?

We think that the total shareholder return of 1,023%, over three years, would leave most Cochin Shipyard Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Cochin Shipyard that investors should look into moving forward.

Switching gears from Cochin Shipyard, 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.

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

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.