Shareholders May Not Be So Generous With Salasar Techno Engineering Limited's (NSE:SALASAR) CEO Compensation And Here's Why

By
Simply Wall St
Published
September 11, 2021
NSEI:SALASAR
Source: Shutterstock

Performance at Salasar Techno Engineering Limited (NSE:SALASAR) has been reasonably good and CEO Alok Kumar has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 18 September 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Salasar Techno Engineering

How Does Total Compensation For Alok Kumar Compare With Other Companies In The Industry?

Our data indicates that Salasar Techno Engineering Limited has a market capitalization of ₹8.4b, and total annual CEO compensation was reported as ₹7.6m for the year to March 2021. That's a slight decrease of 5.0% on the prior year. Notably, the salary of ₹7.6m is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹4.5m. Accordingly, our analysis reveals that Salasar Techno Engineering Limited pays Alok Kumar north of the industry median. What's more, Alok Kumar holds ₹1.0b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary ₹7.6m ₹8.0m 100%
Other - - -
Total Compensation₹7.6m ₹8.0m100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. Speaking on a company level, Salasar Techno Engineering prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
NSEI:SALASAR CEO Compensation September 12th 2021

Salasar Techno Engineering Limited's Growth

Over the past three years, Salasar Techno Engineering Limited has seen its earnings per share (EPS) grow by 5.5% per year. Its revenue is up 56% over the last year.

It's hard to interpret the strong revenue growth as anything other than a positive. Combined with modest EPS growth, we get a good impression of the company. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! 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?

Most shareholders would probably be pleased with Salasar Techno Engineering Limited for providing a total return of 105% over three years. 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.

To Conclude...

Salasar Techno Engineering rewards its CEO solely through a salary, ignoring non-salary benefits completely. Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Salasar Techno Engineering you should be aware of, and 2 of them don't sit too well with us.

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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