Here's Why Shareholders May Want To Be Cautious With Increasing Incredible Industries Limited's (NSE:INCREDIBLE) CEO Pay Packet

Key Insights

• Incredible Industries will host its Annual General Meeting on 27th of September
• Salary of ₹6.00m is part of CEO Rama Gupta's total remuneration
• The overall pay is 78% above the industry average
• Incredible Industries' total shareholder return over the past three years was 69% while its EPS grew by 15% over the past three years

Performance at Incredible Industries Limited (NSE:INCREDIBLE) has been reasonably good and CEO Rama Gupta has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 27th of September. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for Incredible Industries

How Does Total Compensation For Rama Gupta Compare With Other Companies In The Industry?

According to our data, Incredible Industries Limited has a market capitalization of ₹2.2b, and paid its CEO total annual compensation worth ₹6.0m over the year to March 2024. We note that's an increase of 23% above last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹6.0m.

On comparing similar-sized companies in the Indian Metals and Mining industry with market capitalizations below ₹17b, we found that the median total CEO compensation was ₹3.4m. This suggests that Rama Gupta is paid more than the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	₹6.0m	₹4.9m	100%
Other	-	-	-
Total Compensation	₹6.0m	₹4.9m	100%

On an industry level, roughly 100% of total compensation represents salary and 0.14164306% is other remuneration. At the company level, Incredible Industries pays Rama Gupta solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Incredible Industries Limited's Growth Numbers

Incredible Industries Limited's earnings per share (EPS) grew 15% per year over the last three years. It saw its revenue drop 1.8% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Incredible Industries Limited Been A Good Investment?

Most shareholders would probably be pleased with Incredible Industries Limited for providing a total return of 69% 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...

Incredible Industries rewards its CEO solely through a salary, ignoring non-salary benefits completely. Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Incredible Industries you should be aware of, and 1 of them is significant.

Important note: Incredible Industries 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.