Shareholders May Be Wary Of Increasing Indo Rama Synthetics (India) Limited's (NSE:INDORAMA) CEO Compensation Package

Key Insights

• Indo Rama Synthetics (India) will host its Annual General Meeting on 23rd of July
• CEO Om Lohia's total compensation includes salary of ₹24.6m
• The overall pay is comparable to the industry average
• Indo Rama Synthetics (India)'s three-year loss to shareholders was 22% while its EPS was down 83% over the past three years

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Indo Rama Synthetics (India) Limited (NSE:INDORAMA) has not performed well recently and CEO Om Lohia will probably need to up their game. At the upcoming AGM on 23rd of July, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Indo Rama Synthetics (India)

Comparing Indo Rama Synthetics (India) Limited's CEO Compensation With The Industry

According to our data, Indo Rama Synthetics (India) Limited has a market capitalization of ₹13b, and paid its CEO total annual compensation worth ₹30m over the year to March 2025. Notably, that's an increase of 19% over the year before. In particular, the salary of ₹24.6m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Indian Luxury industry with market capitalizations ranging from ₹8.6b to ₹34b, the reported median CEO total compensation was ₹23m. So it looks like Indo Rama Synthetics (India) compensates Om Lohia in line with the median for the industry. Furthermore, Om Lohia directly owns ₹4.7b worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 98% of total compensation represents salary, while the remainder of 2% is other remuneration. Indo Rama Synthetics (India) pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Indo Rama Synthetics (India) Limited's Growth

Over the last three years, Indo Rama Synthetics (India) Limited has shrunk its earnings per share by 83% per year. It achieved revenue growth of 10.0% over the last year.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Indo Rama Synthetics (India) Limited Been A Good Investment?

Since shareholders would have lost about 22% over three years, some Indo Rama Synthetics (India) Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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 shouldn't be ignored) in Indo Rama Synthetics (India) 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.