We Think Shareholders Are Less Likely To Approve A Large Pay Rise For IndiaMART InterMESH Limited's (NSE:INDIAMART) CEO For Now

Key Insights

• IndiaMART InterMESH to hold its Annual General Meeting on 20th of June
• Total pay for CEO Dinesh Agarwal includes ₹50.2m salary
• The total compensation is 252% higher than the average for the industry
• IndiaMART InterMESH's three-year loss to shareholders was 28% while its EPS grew by 5.0% over the past three years

Shareholders of IndiaMART InterMESH Limited (NSE:INDIAMART) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 20th of June could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for IndiaMART InterMESH

Comparing IndiaMART InterMESH Limited's CEO Compensation With The Industry

Our data indicates that IndiaMART InterMESH Limited has a market capitalization of ₹156b, and total annual CEO compensation was reported as ₹69m for the year to March 2024. That's a notable increase of 16% on last year. In particular, the salary of ₹50.2m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the India Trade Distributors industry with market capitalizations ranging from ₹84b to ₹267b, the reported median CEO total compensation was ₹19m. Hence, we can conclude that Dinesh Agarwal is remunerated higher than the industry median. Furthermore, Dinesh Agarwal directly owns ₹45b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹50m	₹38m	73%
Other	₹18m	₹21m	27%
Total Compensation	₹69m	₹59m	100%

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. IndiaMART InterMESH sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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 IndiaMART InterMESH Limited's Growth Numbers

Over the past three years, IndiaMART InterMESH Limited has seen its earnings per share (EPS) grow by 5.0% per year. Its revenue is up 21% over the last year.

This revenue growth could really point to a brighter future. And the improvement in EPSis modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. 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 IndiaMART InterMESH Limited Been A Good Investment?

With a three year total loss of 28% for the shareholders, IndiaMART InterMESH Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for IndiaMART InterMESH that you should be aware of before investing.

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.