We Think Some Shareholders May Hesitate To Increase Lakshmi Finance & Industrial Corporation Limited's (NSE:LFIC) CEO Compensation

Key Insights

• Lakshmi Finance & Industrial will host its Annual General Meeting on 22nd of August
• CEO Kanuri Prasad's total compensation includes salary of ₹8.33m
• The total compensation is 732% higher than the average for the industry
• Over the past three years, Lakshmi Finance & Industrial's EPS grew by 12% and over the past three years, the total shareholder return was 204%

CEO Kanuri Prasad has done a decent job of delivering relatively good performance at Lakshmi Finance & Industrial Corporation Limited (NSE:LFIC) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 22nd of August. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Lakshmi Finance & Industrial

Comparing Lakshmi Finance & Industrial Corporation Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Lakshmi Finance & Industrial Corporation Limited has a market capitalization of ₹686m, and reported total annual CEO compensation of ₹11m for the year to March 2024. Notably, that's an increase of 14% over the year before. Notably, the salary which is ₹8.33m, represents most of the total compensation being paid.

In comparison with other companies in the Indian Capital Markets industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹1.3m. This suggests that Kanuri Prasad is paid more than the median for the industry. Furthermore, Kanuri Prasad directly owns ₹21m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹8.3m	₹7.2m	79%
Other	₹2.2m	₹2.1m	21%
Total Compensation	₹11m	₹9.3m	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. In Lakshmi Finance & Industrial's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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 Lakshmi Finance & Industrial Corporation Limited's Growth Numbers

Lakshmi Finance & Industrial Corporation Limited has seen its earnings per share (EPS) increase by 12% a year over the past three years. In the last year, its revenue is up 146%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Lakshmi Finance & Industrial Corporation Limited Been A Good Investment?

Most shareholders would probably be pleased with Lakshmi Finance & Industrial Corporation Limited for providing a total return of 204% 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...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

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. In our study, we found 4 warning signs for Lakshmi Finance & Industrial you should be aware of, and 1 of them is potentially serious.

Switching gears from Lakshmi Finance & Industrial, 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.