We Think Praj Industries Limited's (NSE:PRAJIND) CEO Compensation Looks Fair

Key Insights

• Praj Industries' Annual General Meeting to take place on 25th of July
• Salary of ₹47.9m is part of CEO Shishir Joshipura's total remuneration
• Total compensation is similar to the industry average
• Praj Industries' total shareholder return over the past three years was 100% while its EPS grew by 52% over the past three years

The performance at Praj Industries Limited (NSE:PRAJIND) has been quite strong recently and CEO Shishir Joshipura has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 25th of July. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

View our latest analysis for Praj Industries

How Does Total Compensation For Shishir Joshipura Compare With Other Companies In The Industry?

Our data indicates that Praj Industries Limited has a market capitalization of ₹129b, and total annual CEO compensation was reported as ₹109m for the year to March 2024. That's a notable increase of 89% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹48m.

On examining similar-sized companies in the Indian Construction industry with market capitalizations between ₹84b and ₹268b, we discovered that the median CEO total compensation of that group was ₹87m. So it looks like Praj Industries compensates Shishir Joshipura in line with the median for the industry. What's more, Shishir Joshipura holds ₹35m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹48m	₹39m	44%
Other	₹62m	₹19m	56%
Total Compensation	₹109m	₹58m	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. In Praj Industries' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Praj Industries Limited's Growth

Praj Industries Limited's earnings per share (EPS) grew 52% per year over the last three years. Its revenue is down 1.8% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Praj Industries Limited Been A Good Investment?

Boasting a total shareholder return of 100% over three years, Praj Industries 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...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Praj Industries (1 is a bit concerning!) that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com