It Looks Like The CEO Of Mold-Tek Packaging Limited (NSE:MOLDTKPAC) May Be Underpaid Compared To Peers

The impressive results at Mold-Tek Packaging Limited (NSE:MOLDTKPAC) recently will be great news for shareholders. At the upcoming AGM on 30 September 2022, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

View our latest analysis for Mold-Tek Packaging

How Does Total Compensation For Lakshmana Janumahanti Compare With Other Companies In The Industry?

At the time of writing, our data shows that Mold-Tek Packaging Limited has a market capitalization of ₹33b, and reported total annual CEO compensation of ₹20m for the year to March 2022. We note that's an increase of 22% above last year. Notably, the salary which is ₹15.9m, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between ₹16b and ₹65b, we discovered that the median CEO total compensation of that group was ₹42m. Accordingly, Mold-Tek Packaging pays its CEO under the industry median. Furthermore, Lakshmana Janumahanti directly owns ₹3.1b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	₹16m	₹13m	78%
Other	₹4.6m	₹3.5m	22%
Total Compensation	₹20m	₹17m	100%

On an industry level, around 100% of total compensation represents salary and 0.3233% is other remuneration. Mold-Tek Packaging 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.

Mold-Tek Packaging Limited's Growth

Mold-Tek Packaging Limited has seen its earnings per share (EPS) increase by 19% a year over the past three years. Its revenue is up 32% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Mold-Tek Packaging Limited Been A Good Investment?

Boasting a total shareholder return of 245% over three years, Mold-Tek Packaging Limited has done well by shareholders. 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.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Mold-Tek Packaging (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Mold-Tek Packaging, 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.