We Think Shareholders Will Probably Be Generous With Titagarh Rail Systems Limited's (NSE:TITAGARH) CEO Compensation

Key Insights

• Titagarh Rail Systems will host its Annual General Meeting on 29th of September
• Total pay for CEO Umesh Chowdhary includes ₹25.7m salary
• The total compensation is similar to the average for the industry
• Titagarh Rail Systems' total shareholder return over the past three years was 1,860% while its EPS grew by 76% over the past three years

We have been pretty impressed with the performance at Titagarh Rail Systems Limited (NSE:TITAGARH) recently and CEO Umesh Chowdhary deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 29th of September. 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. Here is our take on why we think CEO compensation is not extravagant.

Check out our latest analysis for Titagarh Rail Systems

Comparing Titagarh Rail Systems Limited's CEO Compensation With The Industry

Our data indicates that Titagarh Rail Systems Limited has a market capitalization of ₹98b, and total annual CEO compensation was reported as ₹26m for the year to March 2023. That's a modest increase of 7.2% on the prior year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹26m.

For comparison, other companies in the Indian Machinery industry with market capitalizations ranging between ₹33b and ₹133b had a median total CEO compensation of ₹29m. This suggests that Titagarh Rail Systems remunerates its CEO largely in line with the industry average. Furthermore, Umesh Chowdhary directly owns ₹60m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	₹26m	₹24m	100%
Other	-	-	-
Total Compensation	₹26m	₹24m	100%

Talking in terms of the industry, salary represented approximately 90% of total compensation out of all the companies we analyzed, while other remuneration made up 10% of the pie. On a company level, Titagarh Rail Systems prefers to reward its CEO through a salary, opting not to pay Umesh Chowdhary through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Titagarh Rail Systems Limited's Growth

Titagarh Rail Systems Limited's earnings per share (EPS) grew 76% per year over the last three years. In the last year, its revenue is up 67%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast 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 Titagarh Rail Systems Limited Been A Good Investment?

Most shareholders would probably be pleased with Titagarh Rail Systems Limited for providing a total return of 1,860% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Titagarh Rail Systems pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Some shareholders will probably be more lenient on CEO compensation in the upcoming AGM given the pleasing performance of the company recently. In saying that, some shareholders may feel that the more important issues to be addressed may be how the management plans to steer the company towards sustainable profitability in the future.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Titagarh Rail Systems that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.