Ramkrishna Forgings Limited's (NSE:RKFORGE) CEO Will Probably Have Their Compensation Approved By Shareholders

Key Insights

• Ramkrishna Forgings to hold its Annual General Meeting on 31st of August
• CEO Naresh Jalan's total compensation includes salary of ₹23.1m
• The overall pay is comparable to the industry average
• Ramkrishna Forgings' total shareholder return over the past three years was 425% while its EPS grew by 60% over the past three years

It would be hard to discount the role that CEO Naresh Jalan has played in delivering the impressive results at Ramkrishna Forgings Limited (NSE:RKFORGE) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 31st of August. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

Check out our latest analysis for Ramkrishna Forgings

Comparing Ramkrishna Forgings Limited's CEO Compensation With The Industry

Our data indicates that Ramkrishna Forgings Limited has a market capitalization of ₹175b, and total annual CEO compensation was reported as ₹59m for the year to March 2024. Notably, that's an increase of 38% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹23m.

On comparing similar companies from the Indian Metals and Mining industry with market caps ranging from ₹84b to ₹268b, we found that the median CEO total compensation was ₹58m. So it looks like Ramkrishna Forgings compensates Naresh Jalan in line with the median for the industry. Moreover, Naresh Jalan also holds ₹5.7b worth of Ramkrishna Forgings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹23m	₹20m	39%
Other	₹36m	₹22m	61%
Total Compensation	₹59m	₹43m	100%

On an industry level, around 100% of total compensation represents salary and 0.0607219% is other remuneration. In Ramkrishna Forgings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Ramkrishna Forgings Limited's Growth Numbers

Over the past three years, Ramkrishna Forgings Limited has seen its earnings per share (EPS) grow by 60% per year. In the last year, its revenue is up 20%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Ramkrishna Forgings Limited Been A Good Investment?

Boasting a total shareholder return of 425% over three years, Ramkrishna Forgings Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Ramkrishna Forgings that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.