This Is The Reason Why We Think Nitin Spinners Limited's (NSE:NITINSPIN) CEO Might Be Underpaid

Key Insights

• Nitin Spinners' Annual General Meeting to take place on 18th of September
• Salary of ₹5.07m is part of CEO Dinesh Nolkha's total remuneration
• Total compensation is 38% below industry average
• Nitin Spinners' EPS grew by 220% over the past three years while total shareholder return over the past three years was 696%

Shareholders will be pleased by the impressive results for Nitin Spinners Limited (NSE:NITINSPIN) recently and CEO Dinesh Nolkha has played a key role. At the upcoming AGM on 18th of September, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

View our latest analysis for Nitin Spinners

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

According to our data, Nitin Spinners Limited has a market capitalization of ₹17b, and paid its CEO total annual compensation worth ₹15m over the year to March 2023. That's a notable decrease of 53% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹5.1m.

For comparison, other companies in the Indian Luxury industry with market capitalizations ranging between ₹8.3b and ₹33b had a median total CEO compensation of ₹24m. In other words, Nitin Spinners pays its CEO lower than the industry median. Furthermore, Dinesh Nolkha directly owns ₹468m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	₹5.1m	₹4.5m	34%
Other	₹9.7m	₹27m	66%
Total Compensation	₹15m	₹31m	100%

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. In Nitin Spinners' case, non-salary compensation represents a greater slice of total remuneration, in comparison 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.

Nitin Spinners Limited's Growth

Over the past three years, Nitin Spinners Limited has seen its earnings per share (EPS) grow by 220% per year. It saw its revenue drop 19% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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?

Most shareholders would probably be pleased with Nitin Spinners Limited for providing a total return of 696% over three years. 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.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

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 significant) in Nitin Spinners we think you should know about.

Switching gears from Nitin Spinners, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.