We Think Some Shareholders May Hesitate To Increase Prime Securities Limited's (NSE:PRIMESECU) CEO Compensation

Performance at Prime Securities Limited (NSE:PRIMESECU) has been reasonably good and CEO Narayanswami Jayakumar has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 27 September 2022. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Prime Securities

Comparing Prime Securities Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Prime Securities Limited has a market capitalization of ₹3.4b, and reported total annual CEO compensation of ₹45m for the year to March 2022. That's a notable decrease of 32% on last year. Notably, the salary of ₹45m is the entirety of the CEO compensation.

For comparison, other companies in the industry with market capitalizations below ₹16b, reported a median total CEO compensation of ₹1.2m. This suggests that Narayanswami Jayakumar is paid more than the median for the industry. Furthermore, Narayanswami Jayakumar directly owns ₹385m worth of shares in the company, implying that they are deeply invested in the company's success.

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, Prime Securities prefers to reward its CEO through a salary, opting not to pay Narayanswami Jayakumar through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Prime Securities Limited's Growth

Over the last three years, Prime Securities Limited has shrunk its earnings per share by 9.8% per year. In the last year, its revenue is up 19%.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Prime Securities Limited Been A Good Investment?

Most shareholders would probably be pleased with Prime Securities Limited for providing a total return of 214% 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...

Prime Securities rewards its CEO solely through a salary, ignoring non-salary benefits completely. The overall company performance has been commendable, however there are still areas for improvement. Until EPS growth picks back up, we think shareholders may find it hard to justify increasing CEO pay given that they are already paid above industry average.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Prime Securities (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Important note: Prime Securities 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.