Shareholders Will Probably Hold Off On Increasing ICRA Limited's (NSE:ICRA) CEO Compensation For The Time Being

Key Insights

• ICRA's Annual General Meeting to take place on 23rd of July
• Total pay for CEO Ramnath Krishnan includes ₹11.9m salary
• The overall pay is 66% above the industry average
• ICRA's total shareholder return over the past three years was 65% while its EPS grew by 23% over the past three years

CEO Ramnath Krishnan has done a decent job of delivering relatively good performance at ICRA Limited (NSE:ICRA) recently. As shareholders go into the upcoming AGM on 23rd of July, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for ICRA

How Does Total Compensation For Ramnath Krishnan Compare With Other Companies In The Industry?

According to our data, ICRA Limited has a market capitalization of ₹58b, and paid its CEO total annual compensation worth ₹63m over the year to March 2024. We note that's an increase of 26% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹12m.

In comparison with other companies in the Indian Capital Markets industry with market capitalizations ranging from ₹33b to ₹134b, the reported median CEO total compensation was ₹38m. Accordingly, our analysis reveals that ICRA Limited pays Ramnath Krishnan north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	₹12m	₹11m	19%
Other	₹51m	₹39m	81%
Total Compensation	₹63m	₹50m	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. ICRA sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ICRA Limited's Growth

ICRA Limited's earnings per share (EPS) grew 23% per year over the last three years. It achieved revenue growth of 11% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has ICRA Limited Been A Good Investment?

We think that the total shareholder return of 65%, over three years, would leave most ICRA 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...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for ICRA that investors should think about before committing capital to this stock.

Important note: ICRA is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.

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