We Think TD Power Systems Limited's (NSE:TDPOWERSYS) CEO Compensation Looks Fair

The performance at TD Power Systems Limited (NSE:TDPOWERSYS) has been quite strong recently and CEO Nikhil Kumar has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 27 September 2022. 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.

See our latest analysis for TD Power Systems

Comparing TD Power Systems Limited's CEO Compensation With The Industry

According to our data, TD Power Systems Limited has a market capitalization of ₹21b, and paid its CEO total annual compensation worth ₹31m over the year to March 2022. That's slightly lower by 5.8% over the previous year. Notably, the salary which is ₹17.2m, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from ₹8.0b to ₹32b, the reported median CEO total compensation was ₹30m. From this we gather that Nikhil Kumar is paid around the median for CEOs in the industry. Moreover, Nikhil Kumar also holds ₹3.0b worth of TD Power Systems stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	₹17m	₹17m	56%
Other	₹14m	₹16m	44%
Total Compensation	₹31m	₹33m	100%

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. TD Power Systems sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

TD Power Systems Limited's Growth

TD Power Systems Limited's earnings per share (EPS) grew 105% per year over the last three years. Its revenue is up 23% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 TD Power Systems Limited Been A Good Investment?

We think that the total shareholder return of 340%, over three years, would leave most TD Power Systems 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. 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for TD Power Systems that investors should be aware of in a dynamic business environment.

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.