Power & Instrumental (Gujarat) Limited's (NSE:PIGL) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Power & Instrumental (Gujarat) will host its Annual General Meeting on 30th of September
• Salary of ₹5.40m is part of CEO Padmaraj Pillai's total remuneration
• Total compensation is 76% above industry average
• Power & Instrumental (Gujarat)'s total shareholder return over the past three years was 158% while its EPS grew by 1.9% over the past three years

CEO Padmaraj Pillai has done a decent job of delivering relatively good performance at Power & Instrumental (Gujarat) Limited (NSE:PIGL) recently. As shareholders go into the upcoming AGM on 30th of September, 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 want to keep CEO compensation within reason.

See our latest analysis for Power & Instrumental (Gujarat)

How Does Total Compensation For Padmaraj Pillai Compare With Other Companies In The Industry?

Our data indicates that Power & Instrumental (Gujarat) Limited has a market capitalization of ₹2.1b, and total annual CEO compensation was reported as ₹5.4m for the year to March 2024. There was no change in the compensation compared to last year. Notably, the salary of ₹5.4m is the entirety of the CEO compensation.

In comparison with other companies in the Indian Construction industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹3.1m. This suggests that Padmaraj Pillai is paid more than the median for the industry. Moreover, Padmaraj Pillai also holds ₹814m worth of Power & Instrumental (Gujarat) 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	₹5.4m	₹5.4m	100%
Other	-	-	-
Total Compensation	₹5.4m	₹5.4m	100%

Speaking on an industry level, nearly 98% of total compensation represents salary, while the remainder of 2% is other remuneration. At the company level, Power & Instrumental (Gujarat) pays Padmaraj Pillai solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Power & Instrumental (Gujarat) Limited's Growth Numbers

Power & Instrumental (Gujarat) Limited's earnings per share (EPS) grew 1.9% per year over the last three years. In the last year, its revenue is up 1.4%.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Power & Instrumental (Gujarat) Limited Been A Good Investment?

Most shareholders would probably be pleased with Power & Instrumental (Gujarat) Limited for providing a total return of 158% 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...

Power & Instrumental (Gujarat) rewards its CEO solely through a salary, ignoring non-salary benefits completely. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Power & Instrumental (Gujarat) you should be aware of, and 1 of them is a bit unpleasant.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.