This Is The Reason Why We Think Jayaswal Neco Industries Limited's (NSE:JAYNECOIND) CEO Might Be Underpaid

The solid performance at Jayaswal Neco Industries Limited (NSE:JAYNECOIND) has been impressive and shareholders will probably be pleased to know that CEO Ramesh Jayaswal has delivered. This would be kept in mind at the upcoming AGM on 29 September 2022 which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

View 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 ₹30b, and paid its CEO total annual compensation worth ₹12m over the year to March 2022. That's a fairly small increase of 6.3% over the previous year. In particular, the salary of ₹11.5m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between ₹16b and ₹64b had a median total CEO compensation of ₹26m. Accordingly, Jayaswal Neco Industries pays its CEO under the industry median. Furthermore, Ramesh Jayaswal directly owns ₹74m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	₹12m	₹11m	94%
Other	₹713k	₹664k	6%
Total Compensation	₹12m	₹11m	100%

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. There isn't a significant difference between Jayaswal Neco Industries and the broader market, in terms of salary allocation in the overall compensation package. 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.

A Look at Jayaswal Neco Industries Limited's Growth Numbers

Jayaswal Neco Industries Limited has seen its earnings per share (EPS) increase by 87% a year over the past three years. Its revenue is up 27% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Jayaswal Neco Industries Limited Been A Good Investment?

Boasting a total shareholder return of 534% over three years, Jayaswal Neco Industries 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...

Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for Jayaswal Neco Industries (of which 3 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Jayaswal Neco Industries, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.