It's Unlikely That M M Forgings Limited's (NSE:MMFL) CEO Will See A Huge Pay Rise This Year

Key Insights

• M M Forgings' Annual General Meeting to take place on 6th of August
• Salary of ₹31.8m is part of CEO Vidyashankar Krishnan's total remuneration
• The total compensation is 687% higher than the average for the industry
• M M Forgings' EPS grew by 10% over the past three years while total shareholder loss over the past three years was 24%

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Shareholders of M M Forgings Limited (NSE:MMFL) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 6th of August could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for M M Forgings

Comparing M M Forgings Limited's CEO Compensation With The Industry

According to our data, M M Forgings Limited has a market capitalization of ₹17b, and paid its CEO total annual compensation worth ₹93m over the year to March 2025. We note that's a small decrease of 6.7% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹32m.

For comparison, other companies in the Indian Metals and Mining industry with market capitalizations ranging between ₹8.7b and ₹35b had a median total CEO compensation of ₹12m. This suggests that Vidyashankar Krishnan is paid more than the median for the industry. What's more, Vidyashankar Krishnan holds ₹1.9b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 100% of total compensation represents salary, while the remainder of 0.11010791% is other remuneration. M M Forgings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

M M Forgings Limited's Growth

M M Forgings Limited has seen its earnings per share (EPS) increase by 10% a year over the past three years. Its revenue is down 2.4% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has M M Forgings Limited Been A Good Investment?

Given the total shareholder loss of 24% over three years, many shareholders in M M Forgings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. 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 is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 2 which are a bit concerning) in M M Forgings we think you should know about.

Important note: M M Forgings 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.