We Take A Look At Why Siemens Limited's (NSE:SIEMENS) CEO Compensation Is Well Earned

Key Insights

• Siemens' Annual General Meeting to take place on 12th of February
• Total pay for CEO Sunil Mathur includes ₹38.8m salary
• The total compensation is similar to the average for the industry
• Siemens' total shareholder return over the past three years was 133% while its EPS grew by 38% over the past three years

It would be hard to discount the role that CEO Sunil Mathur has played in delivering the impressive results at Siemens Limited (NSE:SIEMENS) recently. Coming up to the next AGM on 12th of February, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for Siemens

How Does Total Compensation For Sunil Mathur Compare With Other Companies In The Industry?

According to our data, Siemens Limited has a market capitalization of ₹2.0t, and paid its CEO total annual compensation worth ₹265m over the year to September 2024. That's a notable increase of 8.0% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹39m.

On comparing similar companies in the India Industrials industry with market capitalizations above ₹699b, we found that the median total CEO compensation was ₹281m. This suggests that Siemens remunerates its CEO largely in line with the industry average.

Component	2024	2023	Proportion (2024)
Salary	₹39m	₹37m	15%
Other	₹226m	₹208m	85%
Total Compensation	₹265m	₹245m	100%

Speaking on an industry level, nearly 85% of total compensation represents salary, while the remainder of 15% is other remuneration. Siemens pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Siemens Limited's Growth

Siemens Limited has seen its earnings per share (EPS) increase by 38% a year over the past three years. Its revenue is up 14% 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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Siemens Limited Been A Good Investment?

We think that the total shareholder return of 133%, over three years, would leave most Siemens 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 the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Siemens that you should be aware of before investing.

Switching gears from Siemens, 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.