We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Mahamaya Steel Industries Limited's (NSE:MAHASTEEL) CEO For Now

Key Insights

• Mahamaya Steel Industries to hold its Annual General Meeting on 29th of September
• CEO Rajesh Agrawal's total compensation includes salary of ₹10.8m
• Total compensation is 194% above industry average
• Over the past three years, Mahamaya Steel Industries' EPS grew by 67% and over the past three years, the total loss to shareholders 34%

The underwhelming share price performance of Mahamaya Steel Industries Limited (NSE:MAHASTEEL) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 29th of September. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Mahamaya Steel Industries

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

At the time of writing, our data shows that Mahamaya Steel Industries Limited has a market capitalization of ₹1.1b, and reported total annual CEO compensation of ₹11m for the year to March 2023. Notably, that's an increase of 50% over the year before. Notably, the salary of ₹11m is the entirety of the CEO compensation.

In comparison with other companies in the Indian Metals and Mining industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹3.7m. This suggests that Rajesh Agrawal is paid more than the median for the industry. Furthermore, Rajesh Agrawal directly owns ₹304m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	₹11m	₹7.2m	100%
Other	-	-	-
Total Compensation	₹11m	₹7.2m	100%

On an industry level, around 100% of total compensation represents salary and 0.0956% is other remuneration. On a company level, Mahamaya Steel Industries prefers to reward its CEO through a salary, opting not to pay Rajesh Agrawal through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Mahamaya Steel Industries Limited's Growth

Mahamaya Steel Industries Limited's earnings per share (EPS) grew 67% per year over the last three years. In the last year, its revenue is up 32%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Mahamaya Steel Industries Limited Been A Good Investment?

With a total shareholder return of -34% over three years, Mahamaya Steel Industries Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Mahamaya Steel Industries rewards its CEO solely through a salary, ignoring non-salary benefits completely. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Mahamaya Steel Industries that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.