It May Be Possible That Jayaswal Neco Industries Limited's (NSE:JAYNECOIND) CEO Compensation Could Get Bumped Up

Shareholders will probably not be disappointed by the robust results at Jayaswal Neco Industries Limited (NSE:JAYNECOIND) recently and they will be keeping this in mind as they go into the AGM on 30 December 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

Check out our latest analysis for Jayaswal Neco Industries

Comparing Jayaswal Neco Industries Limited's CEO Compensation With the industry

According to our data, Jayaswal Neco Industries Limited has a market capitalization of ₹24b, and paid its CEO total annual compensation worth ₹11m over the year to March 2021. We note that's a decrease of 24% compared to last year. Notably, the salary which is ₹10.8m, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between ₹15b and ₹60b had a median total CEO compensation of ₹21m. Accordingly, Jayaswal Neco Industries pays its CEO under the industry median. Moreover, Ramesh Jayaswal also holds ₹60m worth of Jayaswal Neco Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	₹11m	₹14m	94%
Other	₹664k	₹713k	6%
Total Compensation	₹11m	₹15m	100%

Speaking on an industry level, nearly 100% of total compensation represents salary, while the remainder of 0.3946% is other remuneration. Although there is a difference in how total compensation is set, Jayaswal Neco Industries more or less reflects the market in terms of setting the salary. 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 Jayaswal Neco Industries Limited's Growth Numbers

Jayaswal Neco Industries Limited has seen its earnings per share (EPS) increase by 2.8% a year over the past three years. In the last year, its revenue is up 89%.

We like the look of the strong year-on-year improvement in revenue. And in that context, the modest EPS improvement certainly isn't shabby. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. 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 Jayaswal Neco Industries Limited Been A Good Investment?

We think that the total shareholder return of 335%, over three years, would leave most Jayaswal Neco Industries Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

The company's overall performance, while not bad, could be better. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. 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.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Jayaswal Neco Industries that you should be aware of before investing.

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.