We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Manugraph India Limited's (NSE:MANUGRAPH) CEO For Now

In the past three years, the share price of Manugraph India Limited (NSE:MANUGRAPH) has struggled to generate growth for its shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 27 September 2022 could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Manugraph India

Comparing Manugraph India Limited's CEO Compensation With The Industry

According to our data, Manugraph India Limited has a market capitalization of ₹459m, and paid its CEO total annual compensation worth ₹12m over the year to March 2022. We note that's an increase of 73% above last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹12m.

On comparing similar-sized companies in the industry with market capitalizations below ₹16b, we found that the median total CEO compensation was ₹4.8m. This suggests that Sanjay Shah is paid more than the median for the industry. What's more, Sanjay Shah holds ₹57m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2022	2021	Proportion (2022)
Salary	₹12m	₹6.8m	100%
Other	-	-	-
Total Compensation	₹12m	₹6.8m	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. On a company level, Manugraph India prefers to reward its CEO through a salary, opting not to pay Sanjay Shah through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Manugraph India Limited's Growth Numbers

Over the past three years, Manugraph India Limited has seen its earnings per share (EPS) grow by 23% per year. In the last year, its revenue is up 57%.

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 Manugraph India Limited Been A Good Investment?

With a three year total loss of 4.9% for the shareholders, Manugraph India Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Manugraph India pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Manugraph India (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Important note: Manugraph India 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.