Here's Why Shareholders Will Not Be Complaining About Sundaram Finance Limited's (NSE:SUNDARMFIN) CEO Pay Packet

Key Insights

• Sundaram Finance to hold its Annual General Meeting on 23rd of July
• Salary of ₹25.1m is part of CEO Rajiv Lochan's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, Sundaram Finance's EPS grew by 17% and over the past three years, the total shareholder return was 176%

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We have been pretty impressed with the performance at Sundaram Finance Limited (NSE:SUNDARMFIN) recently and CEO Rajiv Lochan deserves a mention for their role in it. Coming up to the next AGM on 23rd of July, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

Check out our latest analysis for Sundaram Finance

How Does Total Compensation For Rajiv Lochan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Sundaram Finance Limited has a market capitalization of ₹560b, and reported total annual CEO compensation of ₹63m for the year to March 2025. That's a notable increase of 16% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹25m.

For comparison, other companies in the Indian Consumer Finance industry with market capitalizations ranging between ₹344b and ₹1.0t had a median total CEO compensation of ₹63m. So it looks like Sundaram Finance compensates Rajiv Lochan in line with the median for the industry. What's more, Rajiv Lochan holds ₹77m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 100% of total compensation out of all the companies we analyzed, while other remuneration made up 0.03443311% of the pie. Sundaram Finance 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.

Sundaram Finance Limited's Growth

Over the past three years, Sundaram Finance Limited has seen its earnings per share (EPS) grow by 17% per year. It achieved revenue growth of 9.5% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Sundaram Finance Limited Been A Good Investment?

Most shareholders would probably be pleased with Sundaram Finance Limited for providing a total return of 176% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Sundaram Finance (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Switching gears from Sundaram Finance, 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.