Here's Why Shareholders May Want To Be Cautious With Increasing Indian Metals and Ferro Alloys Limited's (NSE:IMFA) CEO Pay Packet

Key Insights

• Indian Metals and Ferro Alloys to hold its Annual General Meeting on 31st of July
• Salary of ₹32.4m is part of CEO Subhrakant Panda's total remuneration
• Total compensation is 1,116% above industry average
• Indian Metals and Ferro Alloys' EPS grew by 33% over the past three years while total shareholder return over the past three years was 114%

CEO Subhrakant Panda has done a decent job of delivering relatively good performance at Indian Metals and Ferro Alloys Limited (NSE:IMFA) recently. As shareholders go into the upcoming AGM on 31st of July, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Indian Metals and Ferro Alloys

How Does Total Compensation For Subhrakant Panda Compare With Other Companies In The Industry?

Our data indicates that Indian Metals and Ferro Alloys Limited has a market capitalization of ₹39b, and total annual CEO compensation was reported as ₹212m for the year to March 2024. We note that's an increase of 46% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹32m.

On examining similar-sized companies in the Indian Metals and Mining industry with market capitalizations between ₹17b and ₹67b, we discovered that the median CEO total compensation of that group was ₹17m. This suggests that Subhrakant Panda is paid more than the median for the industry. What's more, Subhrakant Panda holds ₹931m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹32m	₹24m	15%
Other	₹180m	₹121m	85%
Total Compensation	₹212m	₹145m	100%

On an industry level, around 100% of total compensation represents salary and 0.06344785% is other remuneration. In Indian Metals and Ferro Alloys' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Indian Metals and Ferro Alloys Limited's Growth Numbers

Indian Metals and Ferro Alloys Limited's earnings per share (EPS) grew 33% per year over the last three years. In the last year, its revenue is up 3.9%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Indian Metals and Ferro Alloys Limited Been A Good Investment?

Most shareholders would probably be pleased with Indian Metals and Ferro Alloys Limited for providing a total return of 114% 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...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Indian Metals and Ferro Alloys that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com