Garden Reach Shipbuilders & Engineers Limited's (NSE:GRSE) CEO Will Probably Have Their Compensation Approved By Shareholders

Key Insights

• Garden Reach Shipbuilders & Engineers' Annual General Meeting to take place on 20th of September
• CEO P. Hari's total compensation includes salary of ₹5.85m
• Total compensation is similar to the industry average
• Garden Reach Shipbuilders & Engineers' EPS grew by 25% over the past three years while total shareholder return over the past three years was 862%

It would be hard to discount the role that CEO P. Hari has played in delivering the impressive results at Garden Reach Shipbuilders & Engineers Limited (NSE:GRSE) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 20th of September. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Garden Reach Shipbuilders & Engineers

Comparing Garden Reach Shipbuilders & Engineers Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Garden Reach Shipbuilders & Engineers Limited has a market capitalization of ₹204b, and reported total annual CEO compensation of ₹7.6m for the year to March 2024. Notably, that's an increase of 12% over the year before. In particular, the salary of ₹5.85m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Indian Aerospace & Defense industry with market capitalizations ranging between ₹168b and ₹537b had a median total CEO compensation of ₹9.6m. So it looks like Garden Reach Shipbuilders & Engineers compensates P. Hari in line with the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	₹5.9m	₹4.8m	76%
Other	₹1.8m	₹2.0m	24%
Total Compensation	₹7.6m	₹6.8m	100%

On an industry level, around 92% of total compensation represents salary and 8% is other remuneration. Garden Reach Shipbuilders & Engineers sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Garden Reach Shipbuilders & Engineers Limited's Growth

Garden Reach Shipbuilders & Engineers Limited's earnings per share (EPS) grew 25% per year over the last three years. It achieved revenue growth of 41% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Garden Reach Shipbuilders & Engineers Limited Been A Good Investment?

Most shareholders would probably be pleased with Garden Reach Shipbuilders & Engineers Limited for providing a total return of 862% over three years. 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.

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. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which is a bit unpleasant) in Garden Reach Shipbuilders & Engineers we think you should know about.

Important note: Garden Reach Shipbuilders & Engineers is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.