Here's Why Shareholders Should Examine IMP Powers Limited's (NSE:INDLMETER) CEO Compensation Package More Closely

Shareholders will probably not be too impressed with the underwhelming results at IMP Powers Limited (NSE:INDLMETER) recently. At the upcoming AGM on 02 February 2023, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for IMP Powers

Comparing IMP Powers Limited's CEO Compensation With The Industry

At the time of writing, our data shows that IMP Powers Limited has a market capitalization of ₹59m, and reported total annual CEO compensation of ₹5.8m for the year to March 2022. Notably, that's an increase of 48% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹5.8m.

In comparison with other companies in the Indian Electrical industry with market capitalizations under ₹16b, the reported median total CEO compensation was ₹5.9m. This suggests that IMP Powers remunerates its CEO largely in line with the industry average.

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. On a company level, IMP Powers prefers to reward its CEO through a salary, opting not to pay Aaditya Dhoot through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

IMP Powers Limited's Growth

Over the last three years, IMP Powers Limited has shrunk its earnings per share by 90% per year. Its revenue is down 47% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has IMP Powers Limited Been A Good Investment?

With a total shareholder return of -70% over three years, IMP Powers Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

IMP Powers rewards its CEO solely through a salary, ignoring non-salary benefits completely. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for IMP Powers that investors should think about before committing capital to this stock.

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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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.