Increases to CEO Compensation Might Be Put On Hold For Now at Timken India Limited (NSE:TIMKEN)

Key Insights

• Timken India will host its Annual General Meeting on 19th of August
• CEO Sanjay Koul's total compensation includes salary of ₹25.5m
• The total compensation is 100% higher than the average for the industry
• Over the past three years, Timken India's EPS grew by 27% and over the past three years, the total shareholder return was 148%

CEO Sanjay Koul has done a decent job of delivering relatively good performance at Timken India Limited (NSE:TIMKEN) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 19th of August. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Timken India

How Does Total Compensation For Sanjay Koul Compare With Other Companies In The Industry?

At the time of writing, our data shows that Timken India Limited has a market capitalization of ₹292b, and reported total annual CEO compensation of ₹60m for the year to March 2024. That's just a smallish increase of 7.2% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹26m.

In comparison with other companies in the Indian Machinery industry with market capitalizations ranging from ₹168b to ₹537b, the reported median CEO total compensation was ₹30m. This suggests that Sanjay Koul is paid more than the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	₹26m	₹23m	43%
Other	₹34m	₹33m	57%
Total Compensation	₹60m	₹56m	100%

Talking in terms of the industry, salary represented approximately 92% of total compensation out of all the companies we analyzed, while other remuneration made up 8% of the pie. Timken India sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Timken India Limited's Growth Numbers

Timken India Limited's earnings per share (EPS) grew 27% per year over the last three years. Its revenue is up 5.3% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Timken India Limited Been A Good Investment?

We think that the total shareholder return of 148%, over three years, would leave most Timken India 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 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. 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.

Whatever your view on compensation, you might want to check if insiders are buying or selling Timken India shares (free trial).

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.