Increases to L.G. Balakrishnan & Bros Limited's (NSE:LGBBROSLTD) CEO Compensation Might Cool off for now

Key Insights

• L.G. Balakrishnan & Bros to hold its Annual General Meeting on 29th of August
• Salary of ₹10.2m is part of CEO Palanisamy Prabakaran's total remuneration
• The overall pay is 85% above the industry average
• L.G. Balakrishnan & Bros' EPS grew by 18% over the past three years while total shareholder return over the past three years was 248%

Performance at L.G. Balakrishnan & Bros Limited (NSE:LGBBROSLTD) has been reasonably good and CEO Palanisamy Prabakaran has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 29th of August, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for L.G. Balakrishnan & Bros

How Does Total Compensation For Palanisamy Prabakaran Compare With Other Companies In The Industry?

According to our data, L.G. Balakrishnan & Bros Limited has a market capitalization of ₹42b, and paid its CEO total annual compensation worth ₹33m over the year to March 2024. We note that's an increase of 18% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹10m.

For comparison, other companies in the Indian Machinery industry with market capitalizations ranging between ₹17b and ₹67b had a median total CEO compensation of ₹18m. Accordingly, our analysis reveals that L.G. Balakrishnan & Bros Limited pays Palanisamy Prabakaran north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	₹10m	₹9.5m	31%
Other	₹22m	₹18m	69%
Total Compensation	₹33m	₹28m	100%

On an industry level, around 91% of total compensation represents salary and 9% is other remuneration. In L.G. Balakrishnan & Bros' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at L.G. Balakrishnan & Bros Limited's Growth Numbers

Over the past three years, L.G. Balakrishnan & Bros Limited has seen its earnings per share (EPS) grow by 18% per year. In the last year, its revenue is up 7.1%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has L.G. Balakrishnan & Bros Limited Been A Good Investment?

Most shareholders would probably be pleased with L.G. Balakrishnan & Bros Limited for providing a total return of 248% 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 up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for L.G. Balakrishnan & Bros that investors should look into moving forward.

Important note: L.G. Balakrishnan & Bros 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.

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.