Here's Why Shareholders Will Not Be Complaining About Jash Engineering Limited's (NSE:JASH) CEO Pay Packet

Key Insights

• Jash Engineering to hold its Annual General Meeting on 29th of September
• CEO Pratik Patel's total compensation includes salary of ₹9.56m
• Total compensation is similar to the industry average
• Jash Engineering's total shareholder return over the past three years was 632% while its EPS grew by 50% over the past three years

It would be hard to discount the role that CEO Pratik Patel has played in delivering the impressive results at Jash Engineering Limited (NSE:JASH) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 29th of September. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and 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 Jash Engineering

How Does Total Compensation For Pratik Patel Compare With Other Companies In The Industry?

According to our data, Jash Engineering Limited has a market capitalization of ₹16b, and paid its CEO total annual compensation worth ₹11m over the year to March 2023. Notably, that's an increase of 24% over the year before. Notably, the salary which is ₹9.56m, represents most of the total compensation being paid.

In comparison with other companies in the Indian Machinery industry with market capitalizations ranging from ₹8.3b to ₹33b, the reported median CEO total compensation was ₹15m. From this we gather that Pratik Patel is paid around the median for CEOs in the industry. Moreover, Pratik Patel also holds ₹3.5b worth of Jash Engineering 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	₹9.6m	₹9.0m	85%
Other	₹1.6m	-	15%
Total Compensation	₹11m	₹9.0m	100%

On an industry level, around 90% of total compensation represents salary and 10% is other remuneration. Our data reveals that Jash Engineering allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Jash Engineering Limited's Growth

Over the past three years, Jash Engineering Limited has seen its earnings per share (EPS) grow by 50% per year. Its revenue is up 14% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Jash Engineering Limited Been A Good Investment?

Most shareholders would probably be pleased with Jash Engineering Limited for providing a total return of 632% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at 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 is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Jash Engineering that investors should look into moving forward.

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.