Voltamp Transformers Limited's (NSE:VOLTAMP) CEO Compensation Is Looking A Bit Stretched At The Moment

CEO Kanubhai Patel has done a decent job of delivering relatively good performance at Voltamp Transformers Limited (NSE:VOLTAMP) 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 30 September 2021. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Voltamp Transformers

Comparing Voltamp Transformers Limited's CEO Compensation With the industry

At the time of writing, our data shows that Voltamp Transformers Limited has a market capitalization of ₹15b, and reported total annual CEO compensation of ₹49m for the year to March 2021. That's a notable increase of 24% on last year. We note that the salary portion, which stands at ₹32.9m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between ₹7.4b and ₹30b had a median total CEO compensation of ₹26m. This suggests that Kanubhai Patel is paid more than the median for the industry.

Component	2021	2020	Proportion (2021)
Salary	₹33m	₹24m	67%
Other	₹16m	₹16m	33%
Total Compensation	₹49m	₹40m	100%

Talking in terms of the industry, salary represented approximately 97% of total compensation out of all the companies we analyzed, while other remuneration made up 3% of the pie. It's interesting to note that Voltamp Transformers allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Voltamp Transformers Limited's Growth Numbers

Voltamp Transformers Limited has seen its earnings per share (EPS) increase by 14% a year over the past three years. It achieved revenue growth of 5.1% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Voltamp Transformers Limited Been A Good Investment?

We think that the total shareholder return of 85%, over three years, would leave most Voltamp Transformers Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its 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.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Voltamp Transformers that investors should be aware of in a dynamic business environment.

Important note: Voltamp Transformers is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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