We Think The Compensation For IFB Industries Limited's (NSE:IFBIND) CEO Looks About Right

Key Insights

• IFB Industries will host its Annual General Meeting on 29th of July
• Salary of ₹6.07m is part of CEO Bikram Nag's total remuneration
• The overall pay is 89% below the industry average
• IFB Industries' EPS declined by 7.7% over the past three years while total shareholder return over the past three years was 47%

Performance at IFB Industries Limited (NSE:IFBIND) has been rather uninspiring recently and shareholders may be wondering how CEO Bikram Nag plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 29th of July. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for IFB Industries

How Does Total Compensation For Bikram Nag Compare With Other Companies In The Industry?

According to our data, IFB Industries Limited has a market capitalization of ₹62b, and paid its CEO total annual compensation worth ₹6.1m over the year to March 2024. That's a notable increase of 15% on last year. Notably, the salary of ₹6.1m is the entirety of the CEO compensation.

For comparison, other companies in the Indian Consumer Durables industry with market capitalizations ranging between ₹33b and ₹134b had a median total CEO compensation of ₹55m. That is to say, Bikram Nag is paid under the industry median. Moreover, Bikram Nag also holds ₹4.6m worth of IFB Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹6.1m	₹5.3m	100%
Other	-	-	-
Total Compensation	₹6.1m	₹5.3m	100%

On an industry level, around 97% of total compensation represents salary and 3% is other remuneration. At the company level, IFB Industries pays Bikram Nag solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

IFB Industries Limited's Growth

IFB Industries Limited has reduced its earnings per share by 7.7% a year over the last three years. It achieved revenue growth of 5.8% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has IFB Industries Limited Been A Good Investment?

Most shareholders would probably be pleased with IFB Industries Limited for providing a total return of 47% over three years. 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.

In Summary...

IFB Industries pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us wonder if these strong returns can continue. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for IFB Industries 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com