Increases to CEO Compensation Might Be Put On Hold For Now at Emkay Taps and Cutting Tools Limited (NSE:EMKAYTOOLS)

Key Insights

• Emkay Taps and Cutting Tools will host its Annual General Meeting on 4th of September
• Total pay for CEO Ajay Kanoria includes ₹3.60m salary
• The total compensation is 629% higher than the average for the industry
• Emkay Taps and Cutting Tools' total shareholder return over the past three years was 477% while its EPS grew by 45% over the past three years

Under the guidance of CEO Ajay Kanoria, Emkay Taps and Cutting Tools Limited (NSE:EMKAYTOOLS) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 4th of September. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Emkay Taps and Cutting Tools

How Does Total Compensation For Ajay Kanoria Compare With Other Companies In The Industry?

Our data indicates that Emkay Taps and Cutting Tools Limited has a market capitalization of ₹10b, and total annual CEO compensation was reported as ₹31m for the year to March 2024. We note that's an increase of 49% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹3.6m.

On comparing similar-sized companies in the Indian Machinery industry with market capitalizations below ₹17b, we found that the median total CEO compensation was ₹4.2m. Accordingly, our analysis reveals that Emkay Taps and Cutting Tools Limited pays Ajay Kanoria north of the industry median. What's more, Ajay Kanoria holds ₹4.8b 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	₹3.6m	₹3.6m	12%
Other	₹27m	₹17m	88%
Total Compensation	₹31m	₹21m	100%

Talking in terms of the industry, salary represented approximately 91% of total compensation out of all the companies we analyzed, while other remuneration made up 9% of the pie. In Emkay Taps and Cutting Tools' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Emkay Taps and Cutting Tools Limited's Growth Numbers

Emkay Taps and Cutting Tools Limited's earnings per share (EPS) grew 45% per year over the last three years. It achieved revenue growth of 17% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Emkay Taps and Cutting Tools Limited Been A Good Investment?

We think that the total shareholder return of 477%, over three years, would leave most Emkay Taps and Cutting Tools 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...

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, 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Emkay Taps and Cutting Tools (1 shouldn't be ignored!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.