Here's Why Nitin Spinners Limited's (NSE:NITINSPIN) CEO Compensation Is The Least Of Shareholders' Concerns

Key Insights

• Nitin Spinners will host its Annual General Meeting on 16th of September
• Total pay for CEO Dinesh Nolkha includes ₹5.70m salary
• The total compensation is similar to the average for the industry
• Over the past three years, Nitin Spinners' EPS grew by 2.2% and over the past three years, the total shareholder return was 93%

Performance at Nitin Spinners Limited (NSE:NITINSPIN) has been reasonably good and CEO Dinesh Nolkha has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 16th of September, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

View our latest analysis for Nitin Spinners

How Does Total Compensation For Dinesh Nolkha Compare With Other Companies In The Industry?

Our data indicates that Nitin Spinners Limited has a market capitalization of ₹23b, and total annual CEO compensation was reported as ₹25m for the year to March 2024. We note that's an increase of 67% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹5.7m.

On comparing similar companies from the Indian Luxury industry with market caps ranging from ₹8.4b to ₹34b, we found that the median CEO total compensation was ₹22m. This suggests that Nitin Spinners remunerates its CEO largely in line with the industry average. Furthermore, Dinesh Nolkha directly owns ₹636m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹5.7m	₹5.1m	23%
Other	₹19m	₹9.7m	77%
Total Compensation	₹25m	₹15m	100%

Talking in terms of the industry, salary represented approximately 98% of total compensation out of all the companies we analyzed, while other remuneration made up 2% of the pie. Nitin Spinners pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Nitin Spinners Limited's Growth Numbers

Nitin Spinners Limited has seen its earnings per share (EPS) increase by 2.2% a year over the past three years. It achieved revenue growth of 34% over the last year.

It's great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Nitin Spinners Limited Been A Good Investment?

We think that the total shareholder return of 93%, over three years, would leave most Nitin Spinners Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 2 warning signs for Nitin Spinners (1 is significant!) that you should be aware of before investing here.

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.