It Looks Like Shareholders Would Probably Approve Hindustan Aeronautics Limited's (NSE:HAL) CEO Compensation Package

Key Insights

• Hindustan Aeronautics to hold its Annual General Meeting on 28th of August
• CEO C.B. Ananthakrishnan's total compensation includes salary of ₹7.70m
• The overall pay is comparable to the industry average
• Over the past three years, Hindustan Aeronautics' EPS grew by 36% and over the past three years, the total shareholder return was 707%

We have been pretty impressed with the performance at Hindustan Aeronautics Limited (NSE:HAL) recently and CEO C.B. Ananthakrishnan deserves a mention for their role in it. Coming up to the next AGM on 28th of August, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

See our latest analysis for Hindustan Aeronautics

Comparing Hindustan Aeronautics Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Hindustan Aeronautics Limited has a market capitalization of ₹3.2t, and reported total annual CEO compensation of ₹7.7m for the year to March 2024. Notably, that's an increase of 19% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹7.7m.

On comparing similar companies in the Indian Aerospace & Defense industry with market capitalizations above ₹671b, we found that the median total CEO compensation was ₹8.6m. So it looks like Hindustan Aeronautics compensates C.B. Ananthakrishnan in line with the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	₹7.7m	₹6.5m	100%
Other	-	-	-
Total Compensation	₹7.7m	₹6.5m	100%

On an industry level, around 92% of total compensation represents salary and 8% is other remuneration. At the company level, Hindustan Aeronautics pays C.B. Ananthakrishnan solely through a salary, preferring to go down a conventional route. 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 Hindustan Aeronautics Limited's Growth Numbers

Hindustan Aeronautics Limited's earnings per share (EPS) grew 36% per year over the last three years. Its revenue is up 13% 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Hindustan Aeronautics Limited Been A Good Investment?

We think that the total shareholder return of 707%, over three years, would leave most Hindustan Aeronautics 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...

Hindustan Aeronautics pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Hindustan Aeronautics that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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