We Take A Look At Why Salzer Electronics Limited's (NSE:SALZERELEC) CEO Has Earned Their Pay Packet

Key Insights

• Salzer Electronics will host its Annual General Meeting on 14th of September
• Salary of ₹5.85m is part of CEO Rajesh Doraiswamy's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Salzer Electronics' EPS grew by 24% and over the past three years, the total shareholder return was 520%

We have been pretty impressed with the performance at Salzer Electronics Limited (NSE:SALZERELEC) recently and CEO Rajesh Doraiswamy deserves a mention for their role in it. Coming up to the next AGM on 14th of September, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

See our latest analysis for Salzer Electronics

Comparing Salzer Electronics Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Salzer Electronics Limited has a market capitalization of ₹18b, and reported total annual CEO compensation of ₹10m for the year to March 2024. That's just a smallish increase of 6.4% on last year. In particular, the salary of ₹5.85m, makes up a fairly large portion of the total compensation being paid to the CEO.

In comparison with other companies in the Indian Electrical industry with market capitalizations ranging from ₹8.4b to ₹34b, the reported median CEO total compensation was ₹10m. From this we gather that Rajesh Doraiswamy is paid around the median for CEOs in the industry. Moreover, Rajesh Doraiswamy also holds ₹266m worth of Salzer Electronics 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	₹5.9m	₹5.6m	57%
Other	₹4.4m	₹4.1m	43%
Total Compensation	₹10m	₹9.6m	100%

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. In Salzer Electronics' case, non-salary compensation represents a greater slice of total remuneration, in comparison 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.

A Look at Salzer Electronics Limited's Growth Numbers

Salzer Electronics Limited's earnings per share (EPS) grew 24% per year over the last three years. Its revenue is up 13% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Salzer Electronics Limited Been A Good Investment?

Boasting a total shareholder return of 520% over three years, Salzer Electronics 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...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Salzer Electronics (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

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.