Here's Why Shareholders May Consider Paying Dolat Algotech Limited's (NSE:DOLATALGO) CEO A Little More

Key Insights

• Dolat Algotech will host its Annual General Meeting on 30th of September
• Salary of ₹6.00m is part of CEO Pankaj Shah's total remuneration
• Total compensation is 30% below industry average
• Dolat Algotech's EPS grew by 8.2% over the past three years while total shareholder return over the past three years was 75%

The decent performance at Dolat Algotech Limited (NSE:DOLATALGO) recently will please most shareholders as they go into the AGM coming up on 30th of September. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

View our latest analysis for Dolat Algotech

How Does Total Compensation For Pankaj Shah Compare With Other Companies In The Industry?

At the time of writing, our data shows that Dolat Algotech Limited has a market capitalization of ₹27b, and reported total annual CEO compensation of ₹6.0m for the year to March 2024. There was no change in the compensation compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹6.0m.

On examining similar-sized companies in the Indian Capital Markets industry with market capitalizations between ₹17b and ₹67b, we discovered that the median CEO total compensation of that group was ₹8.6m. Accordingly, Dolat Algotech pays its CEO under the industry median. What's more, Pankaj Shah holds ₹693m 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	₹6.0m	₹6.0m	100%
Other	-	-	-
Total Compensation	₹6.0m	₹6.0m	100%

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. On a company level, Dolat Algotech prefers to reward its CEO through a salary, opting not to pay Pankaj Shah through non-salary benefits. 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 Dolat Algotech Limited's Growth Numbers

Over the past three years, Dolat Algotech Limited has seen its earnings per share (EPS) grow by 8.2% per year. In the last year, its revenue is up 105%.

We like the look of the strong year-on-year improvement in revenue. With that in mind, the modestly improving EPS seems positive. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Dolat Algotech Limited Been A Good Investment?

We think that the total shareholder return of 75%, over three years, would leave most Dolat Algotech Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Dolat Algotech pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The company's overall performance, while not bad, could be better. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Dolat Algotech.

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.