We Take A Look At Whether Praj Industries Limited's (NSE:PRAJIND) CEO May Be Underpaid

The impressive results at Praj Industries Limited (NSE:PRAJIND) recently will be great news for shareholders. At the upcoming AGM on 11 August 2021, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

Check out our latest analysis for Praj Industries

Comparing Praj Industries Limited's CEO Compensation With the industry

According to our data, Praj Industries Limited has a market capitalization of ₹71b, and paid its CEO total annual compensation worth ₹32m over the year to March 2021. That's a fairly small increase of 5.4% over the previous year. We note that the salary portion, which stands at ₹23.1m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between ₹30b and ₹119b, we discovered that the median CEO total compensation of that group was ₹63m. Accordingly, Praj Industries pays its CEO under the industry median.

Component	2021	2020	Proportion (2021)
Salary	₹23m	₹26m	72%
Other	₹9.1m	₹4.6m	28%
Total Compensation	₹32m	₹31m	100%

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. Praj Industries pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Praj Industries Limited's Growth Numbers

Praj Industries Limited's earnings per share (EPS) grew 26% per year over the last three years. Its revenue is up 18% 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 Praj Industries Limited Been A Good Investment?

We think that the total shareholder return of 396%, over three years, would leave most Praj Industries Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Praj Industries that you should be aware of before investing.

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. 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.
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