It Looks Like The CEO Of National Aluminium Company Limited (NSE:NATIONALUM) May Be Underpaid Compared To Peers

Key Insights

• National Aluminium will host its Annual General Meeting on 21st of September
• CEO Sridhar Patra's total compensation includes salary of ₹6.39m
• The total compensation is 74% less than the average for the industry
• National Aluminium's total shareholder return over the past three years was 245% while its EPS grew by 181% over the past three years

The solid performance at National Aluminium Company Limited (NSE:NATIONALUM) has been impressive and shareholders will probably be pleased to know that CEO Sridhar Patra has delivered. At the upcoming AGM on 21st of September, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

See our latest analysis for National Aluminium

How Does Total Compensation For Sridhar Patra Compare With Other Companies In The Industry?

At the time of writing, our data shows that National Aluminium Company Limited has a market capitalization of ₹182b, and reported total annual CEO compensation of ₹8.5m for the year to March 2023. Notably, that's an increase of 12% over the year before. Notably, the salary which is ₹6.39m, represents most of the total compensation being paid.

On examining similar-sized companies in the Indian Metals and Mining industry with market capitalizations between ₹83b and ₹266b, we discovered that the median CEO total compensation of that group was ₹32m. This suggests that Sridhar Patra is paid below the industry median.

Component	2023	2022	Proportion (2023)
Salary	₹6.4m	₹5.4m	75%
Other	₹2.1m	₹2.3m	25%
Total Compensation	₹8.5m	₹7.6m	100%

On an industry level, around 100% of total compensation represents salary and 0.1213% is other remuneration. National Aluminium 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 National Aluminium Company Limited's Growth Numbers

Over the past three years, National Aluminium Company Limited has seen its earnings per share (EPS) grow by 181% per year. It saw its revenue drop 12% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 National Aluminium Company Limited Been A Good Investment?

We think that the total shareholder return of 245%, over three years, would leave most National Aluminium Company Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for National Aluminium 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.