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

Key Insights

• SMC Global Securities will host its Annual General Meeting on 28th of June
• CEO Ajay Garg's total compensation includes salary of ₹12.4m
• Total compensation is 118% above industry average
• Over the past three years, SMC Global Securities' EPS fell by 3.4% and over the past three years, the total shareholder return was 63%

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The share price of SMC Global Securities Limited (NSE:SMCGLOBAL) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. The upcoming AGM on 28th of June may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for SMC Global Securities

Comparing SMC Global Securities Limited's CEO Compensation With The Industry

Our data indicates that SMC Global Securities Limited has a market capitalization of ₹14b, and total annual CEO compensation was reported as ₹13m for the year to March 2025. Notably, that's a decrease of 13% over the year before. We note that the salary portion, which stands at ₹12.4m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the Indian Capital Markets industry with market capitalizations between ₹8.7b and ₹35b, we discovered that the median CEO total compensation of that group was ₹6.0m. This suggests that Ajay Garg is paid more than the median for the industry. Furthermore, Ajay Garg directly owns ₹115m 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. SMC Global Securities is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

SMC Global Securities Limited's Growth

SMC Global Securities Limited has reduced its earnings per share by 3.4% a year over the last three years. In the last year, its revenue is up 5.8%.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 SMC Global Securities Limited Been A Good Investment?

We think that the total shareholder return of 63%, over three years, would leave most SMC Global Securities 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...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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. That's why we did our research, and identified 2 warning signs for SMC Global Securities (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: SMC Global 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.