Shareholders Would Not Be Objecting To Godawari Power & Ispat Limited's (NSE:GPIL) CEO Compensation And Here's Why

Key Insights

• Godawari Power & Ispat to hold its Annual General Meeting on 16th of September
• Salary of ₹36.0m is part of CEO Bajrang Agrawal's total remuneration
• The overall pay is comparable to the industry average
• Godawari Power & Ispat's EPS grew by 66% over the past three years while total shareholder return over the past three years was 806%

We have been pretty impressed with the performance at Godawari Power & Ispat Limited (NSE:GPIL) recently and CEO Bajrang Agrawal deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 16th of September. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

View our latest analysis for Godawari Power & Ispat

How Does Total Compensation For Bajrang Agrawal Compare With Other Companies In The Industry?

At the time of writing, our data shows that Godawari Power & Ispat Limited has a market capitalization of ₹84b, and reported total annual CEO compensation of ₹36m for the year to March 2023. We note that's an increase of 50% above last year. Notably, the salary of ₹36m is the entirety of the CEO compensation.

For comparison, other companies in the Indian Metals and Mining industry with market capitalizations ranging between ₹33b and ₹133b had a median total CEO compensation of ₹41m. So it looks like Godawari Power & Ispat compensates Bajrang Agrawal in line with the median for the industry. What's more, Bajrang Agrawal holds ₹9.1b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	₹36m	₹24m	100%
Other	-	-	-
Total Compensation	₹36m	₹24m	100%

On an industry level, roughly 100% of total compensation represents salary and 0.2014% is other remuneration. On a company level, Godawari Power & Ispat prefers to reward its CEO through a salary, opting not to pay Bajrang Agrawal through non-salary benefits. 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 Godawari Power & Ispat Limited's Growth Numbers

Over the past three years, Godawari Power & Ispat Limited has seen its earnings per share (EPS) grow by 66% per year. In the last year, its revenue is down 8.9%.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Godawari Power & Ispat Limited Been A Good Investment?

Boasting a total shareholder return of 806% over three years, Godawari Power & Ispat Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Godawari Power & Ispat pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Godawari Power & Ispat that investors should think about before committing capital to this stock.

Important note: Godawari Power & Ispat 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.