We Take A Look At Why Jash Engineering Limited's (NSE:JASH) CEO Compensation Is Well Earned

Key Insights

• Jash Engineering to hold its Annual General Meeting on 26th of September
• Total pay for CEO Pratik Patel includes ₹12.3m salary
• The overall pay is comparable to the industry average
• Over the past three years, Jash Engineering's EPS grew by 29% and over the past three years, the total shareholder return was 303%

The performance at Jash Engineering Limited (NSE:JASH) has been quite strong recently and CEO Pratik Patel has played a role in it. Coming up to the next AGM on 26th of September, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for Jash Engineering

Comparing Jash Engineering Limited's CEO Compensation With The Industry

According to our data, Jash Engineering Limited has a market capitalization of ₹26b, and paid its CEO total annual compensation worth ₹15m over the year to March 2024. That's a notable increase of 34% on last year. In particular, the salary of ₹12.3m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the Indian Machinery industry with market caps ranging from ₹17b to ₹67b, we found that the median CEO total compensation was ₹19m. This suggests that Jash Engineering remunerates its CEO largely in line with the industry average. What's more, Pratik Patel holds ₹5.6b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹12m	₹9.6m	82%
Other	₹2.7m	₹1.6m	18%
Total Compensation	₹15m	₹11m	100%

Talking in terms of the industry, salary represented approximately 91% of total compensation out of all the companies we analyzed, while other remuneration made up 9% of the pie. Although there is a difference in how total compensation is set, Jash Engineering more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Jash Engineering Limited's Growth

Over the past three years, Jash Engineering Limited has seen its earnings per share (EPS) grow by 29% per year. Its revenue is up 35% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast 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?

We think that the total shareholder return of 303%, over three years, would leave most Jash Engineering 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.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in 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 CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 3 warning signs for Jash Engineering that investors should look into moving forward.

Important note: Jash Engineering is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.