We Think Shareholders Will Probably Be Generous With Indo Tech Transformers Limited's (NSE:INDOTECH) CEO Compensation

Key Insights

• Indo Tech Transformers will host its Annual General Meeting on 29th of September
• CEO Shridhar Gokhale's total compensation includes salary of ₹7.72m
• The overall pay is comparable to the industry average
• Over the past three years, Indo Tech Transformers' EPS grew by 78% and over the past three years, the total shareholder return was 345%

We have been pretty impressed with the performance at Indo Tech Transformers Limited (NSE:INDOTECH) recently and CEO Shridhar Gokhale deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 29th of September. 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 Indo Tech Transformers

How Does Total Compensation For Shridhar Gokhale Compare With Other Companies In The Industry?

According to our data, Indo Tech Transformers Limited has a market capitalization of ₹4.6b, and paid its CEO total annual compensation worth ₹7.7m over the year to March 2023. That's a notable decrease of 14% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹7.7m.

On comparing similar-sized companies in the Indian Electrical industry with market capitalizations below ₹17b, we found that the median total CEO compensation was ₹6.1m. So it looks like Indo Tech Transformers compensates Shridhar Gokhale in line with the median for the industry. Moreover, Shridhar Gokhale also holds ₹2.2m worth of Indo Tech Transformers stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	₹7.7m	₹9.0m	100%
Other	-	-	-
Total Compensation	₹7.7m	₹9.0m	100%

Speaking on an industry level, nearly 85% of total compensation represents salary, while the remainder of 15% is other remuneration. On a company level, Indo Tech Transformers prefers to reward its CEO through a salary, opting not to pay Shridhar Gokhale through non-salary benefits. 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 Indo Tech Transformers Limited's Growth Numbers

Over the past three years, Indo Tech Transformers Limited has seen its earnings per share (EPS) grow by 78% per year. It achieved revenue growth of 32% 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. 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 Indo Tech Transformers Limited Been A Good Investment?

We think that the total shareholder return of 345%, over three years, would leave most Indo Tech Transformers Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Indo Tech Transformers rewards its CEO solely through a salary, ignoring non-salary benefits completely. Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at 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.

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 1 warning sign for Indo Tech Transformers that investors should think about before committing capital to this stock.

Switching gears from Indo Tech Transformers, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.