Damodar Industries Limited's (NSE:DAMODARIND) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Damodar Industries to hold its Annual General Meeting on 17th of August
• Total pay for CEO Ajay Biyani includes ₹5.60m salary
• The overall pay is 51% above the industry average
• Damodar Industries' total shareholder return over the past three years was 12% while its EPS was down 27% over the past three years

Despite positive share price growth of 12% for Damodar Industries Limited (NSE:DAMODARIND) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 17th of August. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

Check out our latest analysis for Damodar Industries

Comparing Damodar Industries Limited's CEO Compensation With The Industry

Our data indicates that Damodar Industries Limited has a market capitalization of ₹1.2b, and total annual CEO compensation was reported as ₹5.6m for the year to March 2024. That's a modest increase of 3.7% on the prior year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹5.6m.

In comparison with other companies in the Indian Luxury industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹3.7m. Hence, we can conclude that Ajay Biyani is remunerated higher than the industry median. What's more, Ajay Biyani holds ₹177m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹5.6m	₹5.4m	100%
Other	-	-	-
Total Compensation	₹5.6m	₹5.4m	100%

On an industry level, around 100% of total compensation represents salary and 0.28564009% is other remuneration. Speaking on a company level, Damodar Industries prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Damodar Industries Limited's Growth Numbers

Over the last three years, Damodar Industries Limited has shrunk its earnings per share by 27% per year. In the last year, its revenue is down 8.3%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Damodar Industries Limited Been A Good Investment?

With a total shareholder return of 12% over three years, Damodar Industries Limited shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Damodar Industries rewards its CEO solely through a salary, ignoring non-salary benefits completely. Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which is a bit concerning) in Damodar Industries we think you should know about.

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.