Shareholders Will Probably Hold Off On Increasing Cords Cable Industries Limited's (NSE:CORDSCABLE) CEO Compensation For The Time Being

Key Insights

• Cords Cable Industries will host its Annual General Meeting on 22nd of September
• Total pay for CEO Naveen Sawhney includes ₹11.2m salary
• Total compensation is 144% above industry average
• Over the past three years, Cords Cable Industries' EPS fell by 4.4% and over the past three years, the total shareholder return was 126%

The share price of Cords Cable Industries Limited (NSE:CORDSCABLE) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 22nd of September. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for Cords Cable Industries

Comparing Cords Cable Industries Limited's CEO Compensation With The Industry

Our data indicates that Cords Cable Industries Limited has a market capitalization of ₹1.2b, and total annual CEO compensation was reported as ₹15m for the year to March 2023. Notably, that's an increase of 37% over the year before. We note that the salary portion, which stands at ₹11.2m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Indian Electrical industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹6.1m. Hence, we can conclude that Naveen Sawhney is remunerated higher than the industry median. Moreover, Naveen Sawhney also holds ₹589m worth of Cords Cable Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	₹11m	₹11m	75%
Other	₹3.7m	₹39k	25%
Total Compensation	₹15m	₹11m	100%

On an industry level, around 76% of total compensation represents salary and 24% is other remuneration. Our data reveals that Cords Cable Industries 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 Cords Cable Industries Limited's Growth Numbers

Over the last three years, Cords Cable Industries Limited has shrunk its earnings per share by 4.4% per year. Its revenue is up 14% over the last year.

The decline in EPS is a bit concerning. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Cords Cable Industries Limited Been A Good Investment?

Boasting a total shareholder return of 126% over three years, Cords Cable Industries Limited has done well by shareholders. 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...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Cords Cable Industries (2 don't sit too well with us!) that you should be aware of before investing here.

Switching gears from Cords Cable Industries, 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.