NRB Bearings Limited's (NSE:NRBBEARING) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• NRB Bearings' Annual General Meeting to take place on 29th of September
• CEO Harshbeena Zaveri's total compensation includes salary of ₹42.9m
• Total compensation is 167% above industry average
• Over the past three years, NRB Bearings' EPS grew by 137% and over the past three years, the total shareholder return was 302%

CEO Harshbeena Zaveri has done a decent job of delivering relatively good performance at NRB Bearings Limited (NSE:NRBBEARING) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 29th of September. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for NRB Bearings

How Does Total Compensation For Harshbeena Zaveri Compare With Other Companies In The Industry?

At the time of writing, our data shows that NRB Bearings Limited has a market capitalization of ₹27b, and reported total annual CEO compensation of ₹51m for the year to March 2023. We note that's a decrease of 16% compared to last year. We note that the salary portion, which stands at ₹42.9m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Indian Machinery industry with market capitalizations ranging between ₹17b and ₹66b had a median total CEO compensation of ₹19m. This suggests that Harshbeena Zaveri is paid more than the median for the industry. Moreover, Harshbeena Zaveri also holds ₹3.2b worth of NRB Bearings 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	₹43m	₹54m	83%
Other	₹8.6m	₹7.0m	17%
Total Compensation	₹51m	₹61m	100%

On an industry level, around 90% of total compensation represents salary and 10% is other remuneration. Although there is a difference in how total compensation is set, NRB Bearings more or less reflects the market in terms of setting the salary. 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.

A Look at NRB Bearings Limited's Growth Numbers

Over the past three years, NRB Bearings Limited has seen its earnings per share (EPS) grow by 137% per year. It achieved revenue growth of 12% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has NRB Bearings Limited Been A Good Investment?

Most shareholders would probably be pleased with NRB Bearings Limited for providing a total return of 302% 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...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for NRB Bearings that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.