Why We Think Sarda Energy & Minerals Limited's (NSE:SARDAEN) CEO Compensation Is Not Excessive At All

Key Insights

• Sarda Energy & Minerals to hold its Annual General Meeting on 26th of September
• Total pay for CEO Kamal Sarda includes ₹20.1m salary
• The total compensation is similar to the average for the industry
• Sarda Energy & Minerals' total shareholder return over the past three years was 497% while its EPS grew by 3.6% over the past three years

CEO Kamal Sarda has done a decent job of delivering relatively good performance at Sarda Energy & Minerals Limited (NSE:SARDAEN) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 26th of September. We present our case of why we think CEO compensation looks fair.

View our latest analysis for Sarda Energy & Minerals

Comparing Sarda Energy & Minerals Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Sarda Energy & Minerals Limited has a market capitalization of ₹146b, and reported total annual CEO compensation of ₹73m for the year to March 2024. Notably, that's a decrease of 13% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹20m.

In comparison with other companies in the Indian Metals and Mining industry with market capitalizations ranging from ₹84b to ₹268b, the reported median CEO total compensation was ₹59m. So it looks like Sarda Energy & Minerals compensates Kamal Sarda in line with the median for the industry. Furthermore, Kamal Sarda directly owns ₹2.5b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹20m	₹19m	27%
Other	₹53m	₹66m	73%
Total Compensation	₹73m	₹84m	100%

Talking in terms of the industry, salary represented approximately 100% of total compensation out of all the companies we analyzed, while other remuneration made up 0.12587548% of the pie. In Sarda Energy & Minerals' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Sarda Energy & Minerals Limited's Growth Numbers

Over the past three years, Sarda Energy & Minerals Limited has seen its earnings per share (EPS) grow by 3.6% per year. Its revenue is down 6.5% over the previous year.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Sarda Energy & Minerals Limited Been A Good Investment?

Boasting a total shareholder return of 497% over three years, Sarda Energy & Minerals 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.

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. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Sarda Energy & Minerals that investors should think about before committing capital to this stock.

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.