We Take A Look At Why Timken India Limited's (NSE:TIMKEN) CEO Has Earned Their Pay Packet

It would be hard to discount the role that CEO Sanjay Koul has played in delivering the impressive results at Timken India Limited (NSE:TIMKEN) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 23 August 2021. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Timken India

Comparing Timken India Limited's CEO Compensation With the industry

At the time of writing, our data shows that Timken India Limited has a market capitalization of ₹118b, and reported total annual CEO compensation of ₹36m for the year to March 2021. Notably, that's an increase of 13% over the year before. Notably, the salary which is ₹22.7m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from ₹74b to ₹238b, the reported median CEO total compensation was ₹30m. This suggests that Timken India remunerates its CEO largely in line with the industry average.

Component	2021	2020	Proportion (2021)
Salary	₹23m	₹17m	63%
Other	₹13m	₹15m	37%
Total Compensation	₹36m	₹32m	100%

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. Timken India 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.

Timken India Limited's Growth

Over the past three years, Timken India Limited has seen its earnings per share (EPS) grow by 20% per year. It achieved revenue growth of 28% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Timken India Limited Been A Good Investment?

Boasting a total shareholder return of 133% over three years, Timken India Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

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.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Timken India (free visualization of insider trades).

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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