We Think Some Shareholders May Hesitate To Increase Hitachi Energy India Limited's (NSE:POWERINDIA) CEO Compensation

Key Insights

• Hitachi Energy India to hold its Annual General Meeting on 21st of August
• Salary of ₹78.7m is part of CEO Venu Nuguri's total remuneration
• The overall pay is 98% above the industry average
• Over the past three years, Hitachi Energy India's EPS grew by 14% and over the past three years, the total shareholder return was 512%

Performance at Hitachi Energy India Limited (NSE:POWERINDIA) has been reasonably good and CEO Venu Nuguri has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 21st of August, 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 be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Hitachi Energy India

Comparing Hitachi Energy India Limited's CEO Compensation With The Industry

Our data indicates that Hitachi Energy India Limited has a market capitalization of ₹471b, and total annual CEO compensation was reported as ₹79m for the year to March 2024. That's a notable increase of 48% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹79m.

For comparison, other companies in the Indian Electrical industry with market capitalizations ranging between ₹336b and ₹1.0t had a median total CEO compensation of ₹40m. Accordingly, our analysis reveals that Hitachi Energy India Limited pays Venu Nuguri north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	₹79m	₹39m	100%
Other	-	₹15m	-
Total Compensation	₹79m	₹53m	100%

Talking in terms of the industry, salary represented approximately 84% of total compensation out of all the companies we analyzed, while other remuneration made up 16% of the pie. On a company level, Hitachi Energy India prefers to reward its CEO through a salary, opting not to pay Venu Nuguri through non-salary benefits. 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 Hitachi Energy India Limited's Growth Numbers

Over the past three years, Hitachi Energy India Limited has seen its earnings per share (EPS) grow by 14% per year. Its revenue is up 22% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Hitachi Energy India Limited Been A Good Investment?

Boasting a total shareholder return of 512% over three years, Hitachi Energy India Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Hitachi Energy India pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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, 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Hitachi Energy India 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.