NMDC Limited's (NSE:NMDC) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

• NMDC to hold its Annual General Meeting on 24th of September
• Total pay for CEO Amitava Mukherjee includes ₹6.78m salary
• The overall pay is comparable to the industry average
• Over the past three years, NMDC's EPS fell by 12% and over the past three years, the total shareholder return was 144%

Performance at NMDC Limited (NSE:NMDC) has been reasonably good and CEO Amitava Mukherjee has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 24th of September. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

Check out our latest analysis for NMDC

How Does Total Compensation For Amitava Mukherjee Compare With Other Companies In The Industry?

According to our data, NMDC Limited has a market capitalization of ₹629b, and paid its CEO total annual compensation worth ₹6.8m over the year to March 2024. We note that's an increase of 11% above last year. Notably, the salary of ₹6.8m is the entirety of the CEO compensation.

On examining similar-sized companies in the Indian Metals and Mining industry with market capitalizations between ₹335b and ₹1.0t, we discovered that the median CEO total compensation of that group was ₹8.3m. From this we gather that Amitava Mukherjee is paid around the median for CEOs in the industry.

Component	2024	2023	Proportion (2024)
Salary	₹6.8m	₹6.1m	100%
Other	-	-	-
Total Compensation	₹6.8m	₹6.1m	100%

On an industry level, around 100% of total compensation represents salary and 0.14164306% is other remuneration. At the company level, NMDC pays Amitava Mukherjee solely through a salary, preferring to go down a conventional route. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at NMDC Limited's Growth Numbers

Over the last three years, NMDC Limited has shrunk its earnings per share by 12% per year. In the last year, its revenue is up 17%.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has NMDC Limited Been A Good Investment?

We think that the total shareholder return of 144%, over three years, would leave most NMDC Limited shareholders smiling. 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...

NMDC rewards its CEO solely through a salary, ignoring non-salary benefits completely. The overall company performance has been commendable, however there are still areas for improvement. We reckon that there are some shareholders who may be hesitant to increase CEO pay further until EPS growth starts to improve, despite the robust revenue growth.

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. We've identified 1 warning sign for NMDC that investors should be aware of in a dynamic business environment.

Important note: NMDC 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.