Shareholders May Not Be So Generous With Manaksia Limited's (NSE:MANAKSIA) CEO Compensation And Here's Why

Key Insights

• Manaksia's Annual General Meeting to take place on 18th of September
• Salary of ₹13.1m is part of CEO Suresh Agrawal's total remuneration
• The total compensation is 340% higher than the average for the industry
• Manaksia's total shareholder return over the past three years was 53% while its EPS was down 3.4% over the past three years

Manaksia Limited (NSE:MANAKSIA) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 18th of September. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

View our latest analysis for Manaksia

Comparing Manaksia Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Manaksia Limited has a market capitalization of ₹6.4b, and reported total annual CEO compensation of ₹15m for the year to March 2024. We note that's an increase of 76% above last year. We note that the salary portion, which stands at ₹13.1m constitutes the majority of total compensation received by the CEO.

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 Suresh Agrawal is paid more than the median for the industry. Furthermore, Suresh Agrawal directly owns ₹641m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹13m	₹8.4m	89%
Other	₹1.7m	-	11%
Total Compensation	₹15m	₹8.4m	100%

Talking in terms of the industry, salary represented approximately 100% of total compensation out of all the companies we analyzed, while other remuneration made up 0.10229686% of the pie. Manaksia pays a modest slice of remuneration through salary, as compared to the broader industry. 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 Manaksia Limited's Growth Numbers

Over the last three years, Manaksia Limited has shrunk its earnings per share by 3.4% per year. In the last year, its revenue is down 48%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Manaksia Limited Been A Good Investment?

Most shareholders would probably be pleased with Manaksia Limited for providing a total return of 53% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Manaksia that investors should be aware of in a dynamic business environment.

Important note: Manaksia 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.