Shareholders May Not Be So Generous With Precision Wires India Limited's (NSE:PRECWIRE) CEO Compensation And Here's Why

Key Insights

• Precision Wires India will host its Annual General Meeting on 20th of September
• Total pay for CEO Mahendra Mehta includes ₹2.40m salary
• Total compensation is 38% above industry average
• Precision Wires India's total shareholder return over the past three years was 517% while its EPS grew by 14% over the past three years

CEO Mahendra Mehta has done a decent job of delivering relatively good performance at Precision Wires India Limited (NSE:PRECWIRE) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 20th of September. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Precision Wires India

Comparing Precision Wires India Limited's CEO Compensation With The Industry

According to our data, Precision Wires India Limited has a market capitalization of ₹35b, and paid its CEO total annual compensation worth ₹15m over the year to March 2024. That's a notable increase of 28% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹2.4m.

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. Hence, we can conclude that Mahendra Mehta is remunerated higher than the industry median. Moreover, Mahendra Mehta also holds ₹1.3b worth of Precision Wires India 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	₹2.4m	₹2.4m	16%
Other	₹12m	₹9.0m	84%
Total Compensation	₹15m	₹11m	100%

On an industry level, roughly 83% of total compensation represents salary and 17% is other remuneration. Precision Wires India sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Precision Wires India Limited's Growth

Over the past three years, Precision Wires India Limited has seen its earnings per share (EPS) grow by 14% per year. Its revenue is up 15% 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Precision Wires India Limited Been A Good Investment?

We think that the total shareholder return of 517%, over three years, would leave most Precision Wires India Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

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.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Precision Wires India that investors should be aware of in a dynamic business environment.

Switching gears from Precision Wires India, 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.