We Take A Look At Why Premier Explosives Limited's (NSE:PREMEXPLN) CEO Compensation Is Well Earned

Key Insights

• Premier Explosives to hold its Annual General Meeting on 27th of September
• Salary of ₹10.3m is part of CEO Thati, Venkaiah Chowdary's total remuneration
• Total compensation is similar to the industry average
• Premier Explosives' EPS grew by 85% over the past three years while total shareholder return over the past three years was 1,041%

We have been pretty impressed with the performance at Premier Explosives Limited (NSE:PREMEXPLN) recently and CEO Thati, Venkaiah Chowdary deserves a mention for their role in it. Coming up to the next AGM on 27th of September, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Premier Explosives

How Does Total Compensation For Thati, Venkaiah Chowdary Compare With Other Companies In The Industry?

According to our data, Premier Explosives Limited has a market capitalization of ₹29b, and paid its CEO total annual compensation worth ₹16m over the year to March 2024. That's a notable increase of 33% on last year. In particular, the salary of ₹10.3m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the Indian Chemicals industry with market caps ranging from ₹17b to ₹67b, we found that the median CEO total compensation was ₹23m. This suggests that Premier Explosives remunerates its CEO largely in line with the industry average. What's more, Thati, Venkaiah Chowdary holds ₹80m 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 89% of total compensation represents salary, while the remainder of 11% is other remuneration. Premier Explosives sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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.

Premier Explosives Limited's Growth

Over the past three years, Premier Explosives Limited has seen its earnings per share (EPS) grow by 85% per year. It achieved revenue growth of 38% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Premier Explosives Limited Been A Good Investment?

We think that the total shareholder return of 1,041%, over three years, would leave most Premier Explosives 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...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at 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.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Premier Explosives.

Switching gears from Premier Explosives, 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.