Here's Why Salzer Electronics Limited's (NSE:SALZERELEC) CEO Is Unlikely to Expect A Pay Rise This Year

Under the guidance of CEO Rajesh Doraiswamy, Salzer Electronics Limited (NSE:SALZERELEC) has performed reasonably well recently. As shareholders go into the upcoming AGM on 13 September 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

View our latest analysis for Salzer Electronics

How Does Total Compensation For Rajesh Doraiswamy Compare With Other Companies In The Industry?

Our data indicates that Salzer Electronics Limited has a market capitalization of ₹2.7b, and total annual CEO compensation was reported as ₹6.7m for the year to March 2021. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at ₹4.35m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹5.8m. This suggests that Salzer Electronics remunerates its CEO largely in line with the industry average. What's more, Rajesh Doraiswamy holds ₹45m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	₹4.4m	₹4.0m	65%
Other	₹2.3m	₹2.5m	35%
Total Compensation	₹6.7m	₹6.5m	100%

Talking in terms of the industry, salary represented approximately 97% of total compensation out of all the companies we analyzed, while other remuneration made up 3% of the pie. Salzer Electronics pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Salzer Electronics Limited's Growth

Salzer Electronics Limited's earnings per share (EPS) grew 2.5% per year over the last three years. In the last year, its revenue is up 31%.

It's great to see that revenue growth is strong. Combined with modest EPS growth, we get a good impression of the company. We wouldn't say this is necessarily top notch growth, but it is certainly promising. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Salzer Electronics Limited Been A Good Investment?

With a total shareholder return of 2.5% over three years, Salzer Electronics Limited has done okay by shareholders, but there's always room for improvement. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

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. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Salzer Electronics (1 makes us a bit uncomfortable!) 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.
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