Increases to Madhav Marbles and Granites Limited's (NSE:MADHAV) CEO Compensation Might Cool off for now

Key Insights

• Madhav Marbles and Granites will host its Annual General Meeting on 30th of September
• CEO Madhav Doshi's total compensation includes salary of ₹5.77m
• Total compensation is 94% above industry average
• Madhav Marbles and Granites' EPS declined by 13% over the past three years while total shareholder return over the past three years was 0.9%

Share price growth at Madhav Marbles and Granites Limited (NSE:MADHAV) has remained rather flat over the last few years and it may be because earnings has struggled to grow at all. The upcoming AGM on 30th of September may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for Madhav Marbles and Granites

How Does Total Compensation For Madhav Doshi Compare With Other Companies In The Industry?

At the time of writing, our data shows that Madhav Marbles and Granites Limited has a market capitalization of ₹483m, and reported total annual CEO compensation of ₹7.2m for the year to March 2024. That's a slight decrease of 4.0% on the prior year. We note that the salary portion, which stands at ₹5.77m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Indian Building industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹3.7m. This suggests that Madhav Doshi is paid more than the median for the industry. What's more, Madhav Doshi holds ₹100m 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	₹5.8m	₹5.8m	80%
Other	₹1.4m	₹1.7m	20%
Total Compensation	₹7.2m	₹7.5m	100%

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. Madhav Marbles and Granites pays a modest slice of remuneration through salary, as compared to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Madhav Marbles and Granites Limited's Growth

Over the last three years, Madhav Marbles and Granites Limited has shrunk its earnings per share by 13% per year. Its revenue is down 9.8% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Madhav Marbles and Granites Limited Been A Good Investment?

Madhav Marbles and Granites Limited has generated a total shareholder return of 0.9% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

The flat share price growth combined with the the fact that earnings have failed to grow makes us wonder whether the share price will have any further strong momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 2 which are a bit concerning) in Madhav Marbles and Granites we think you should know about.

Important note: Madhav Marbles and Granites 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.