Shareholders Will Probably Not Have Any Issues With Reliance Industrial Infrastructure Limited's (NSE:RIIL) CEO Compensation

CEO Dilipkumar Dherai has done a decent job of delivering relatively good performance at Reliance Industrial Infrastructure Limited (NSE:RIIL) recently. As shareholders go into the upcoming AGM on 28 September 2022, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.

View our latest analysis for Reliance Industrial Infrastructure

Comparing Reliance Industrial Infrastructure Limited's CEO Compensation With The Industry

According to our data, Reliance Industrial Infrastructure Limited has a market capitalization of ₹18b, and paid its CEO total annual compensation worth ₹12m over the year to March 2022. That's just a smallish increase of 7.4% on last year. Notably, the salary which is ₹11.0m, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between ₹8.0b and ₹32b, we discovered that the median CEO total compensation of that group was ₹12m. So it looks like Reliance Industrial Infrastructure compensates Dilipkumar Dherai in line with the median for the industry. What's more, Dilipkumar Dherai holds ₹1.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2022	2021	Proportion (2022)
Salary	₹11m	₹10m	96%
Other	₹486k	₹462k	4%
Total Compensation	₹12m	₹11m	100%

Talking in terms of the industry, salary represented approximately 85% of total compensation out of all the companies we analyzed, while other remuneration made up 15% of the pie. Reliance Industrial Infrastructure is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. 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.

Reliance Industrial Infrastructure Limited's Growth

Over the last three years, Reliance Industrial Infrastructure Limited has shrunk its earnings per share by 6.9% per year. It achieved revenue growth of 16% over the last year.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Reliance Industrial Infrastructure Limited Been A Good Investment?

We think that the total shareholder return of 332%, over three years, would leave most Reliance Industrial Infrastructure Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Dilipkumar receives almost all of their compensation through a salary. The overall company performance has been commendable, however there are still areas for improvement. Despite robust revenue growth, until EPS growth improves, shareholders may be hesitant to increase CEO pay by too much.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for Reliance Industrial Infrastructure (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.