Paramount Communications Limited's (NSE:PARACABLES) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Paramount Communications to hold its Annual General Meeting on 19th of September
• CEO Sanjay Aggarwal's total compensation includes salary of ₹16.3m
• Total compensation is 62% above industry average
• Paramount Communications' total shareholder return over the past three years was 585% while its EPS grew by 151% over the past three years

CEO Sanjay Aggarwal has done a decent job of delivering relatively good performance at Paramount Communications Limited (NSE:PARACABLES) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 19th of September. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Paramount Communications

How Does Total Compensation For Sanjay Aggarwal Compare With Other Companies In The Industry?

Our data indicates that Paramount Communications Limited has a market capitalization of ₹27b, and total annual CEO compensation was reported as ₹18m for the year to March 2024. That is, the compensation was roughly the same as last year. Notably, the salary which is ₹16.3m, represents most of the total compensation being paid.

On comparing similar companies from the Indian Electrical industry with market caps ranging from ₹17b to ₹67b, we found that the median CEO total compensation was ₹11m. Accordingly, our analysis reveals that Paramount Communications Limited pays Sanjay Aggarwal north of the industry median. Moreover, Sanjay Aggarwal also holds ₹3.9b worth of Paramount Communications stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹16m	₹16m	90%
Other	₹1.8m	₹1.8m	10%
Total Compensation	₹18m	₹18m	100%

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. It's interesting to note that Paramount Communications pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Paramount Communications Limited's Growth

Paramount Communications Limited has seen its earnings per share (EPS) increase by 151% a year over the past three years. In the last year, its revenue is up 40%.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Paramount Communications Limited Been A Good Investment?

Boasting a total shareholder return of 585% over three years, Paramount Communications Limited has done well by shareholders. 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.

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. 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. That's why we did some digging and identified 1 warning sign for Paramount Communications that you should be aware of before investing.

Switching gears from Paramount Communications, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.