Salasar Techno Engineering Limited's (NSE:SALASAR) CEO Looks Due For A Compensation Raise

Key Insights

• Salasar Techno Engineering will host its Annual General Meeting on 23rd of September
• Total pay for CEO Alok Kumar includes ₹9.11m salary
• Total compensation is 64% below industry average
• Over the past three years, Salasar Techno Engineering's EPS grew by 33% and over the past three years, the total shareholder return was 473%

The solid performance at Salasar Techno Engineering Limited (NSE:SALASAR) has been impressive and shareholders will probably be pleased to know that CEO Alok Kumar has delivered. This would be kept in mind at the upcoming AGM on 23rd of September which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

View our latest analysis for Salasar Techno Engineering

Comparing Salasar Techno Engineering Limited's CEO Compensation With The Industry

Our data indicates that Salasar Techno Engineering Limited has a market capitalization of ₹16b, and total annual CEO compensation was reported as ₹9.1m for the year to March 2023. Notably, that's an increase of 10.0% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹9.1m.

On examining similar-sized companies in the Indian Construction industry with market capitalizations between ₹8.3b and ₹33b, we discovered that the median CEO total compensation of that group was ₹26m. Accordingly, Salasar Techno Engineering pays its CEO under the industry median. Moreover, Alok Kumar also holds ₹1.8b worth of Salasar Techno Engineering stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	₹9.1m	₹8.3m	100%
Other	-	-	-
Total Compensation	₹9.1m	₹8.3m	100%

On an industry level, roughly 97% of total compensation represents salary and 3% is other remuneration. Speaking on a company level, Salasar Techno Engineering prefers to tread along a traditional path, disbursing all compensation through a salary. 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 Salasar Techno Engineering Limited's Growth Numbers

Salasar Techno Engineering Limited has seen its earnings per share (EPS) increase by 33% a year over the past three years. In the last year, its revenue is up 33%.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Salasar Techno Engineering Limited Been A Good Investment?

Boasting a total shareholder return of 473% over three years, Salasar Techno Engineering Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Salasar Techno Engineering rewards its CEO solely through a salary, ignoring non-salary benefits completely. 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 1 warning sign for Salasar Techno Engineering that investors should think about before committing capital to this stock.

Important note: Salasar Techno Engineering is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.