Here's Why Shareholders May Want To Be Cautious With Increasing Sarda Energy & Minerals Limited's (NSE:SARDAEN) CEO Pay Packet

Under the guidance of CEO Kamal Sarda, Sarda Energy & Minerals Limited (NSE:SARDAEN) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 29 September 2022. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Sarda Energy & Minerals

How Does Total Compensation For Kamal Sarda Compare With Other Companies In The Industry?

Our data indicates that Sarda Energy & Minerals Limited has a market capitalization of ₹31b, and total annual CEO compensation was reported as ₹86m for the year to March 2022. Notably, that's an increase of 84% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹18m.

For comparison, other companies in the same industry with market capitalizations ranging between ₹16b and ₹64b had a median total CEO compensation of ₹26m. Accordingly, our analysis reveals that Sarda Energy & Minerals Limited pays Kamal Sarda north of the industry median. Moreover, Kamal Sarda also holds ₹476m worth of Sarda Energy & Minerals stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	₹18m	₹16m	21%
Other	₹68m	₹30m	79%
Total Compensation	₹86m	₹47m	100%

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Sarda Energy & Minerals pays a modest slice of remuneration through salary, as compared 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.

Sarda Energy & Minerals Limited's Growth

Sarda Energy & Minerals Limited has seen its earnings per share (EPS) increase by 59% a year over the past three years. It achieved revenue growth of 62% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Sarda Energy & Minerals Limited Been A Good Investment?

We think that the total shareholder return of 454%, over three years, would leave most Sarda Energy & Minerals 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.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Sarda Energy & Minerals that investors should look into moving forward.

Important note: Sarda Energy & Minerals 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.