We Think Some Shareholders May Hesitate To Increase Shree Rama Multi-Tech Limited's (NSE:SHREERAMA) CEO Compensation

Under the guidance of CEO Shailesh Desai, Shree Rama Multi-Tech Limited (NSE:SHREERAMA) 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 23 September 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Shree Rama Multi-Tech

How Does Total Compensation For Shailesh Desai Compare With Other Companies In The Industry?

According to our data, Shree Rama Multi-Tech Limited has a market capitalization of ₹762m, and paid its CEO total annual compensation worth ₹7.0m over the year to March 2021. This was the same as last year. In particular, the salary of ₹6.92m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹2.5m. Accordingly, our analysis reveals that Shree Rama Multi-Tech Limited pays Shailesh Desai north of the industry median.

Component	2021	2020	Proportion (2021)
Salary	₹6.9m	₹6.8m	99%
Other	₹85k	₹245k	1%
Total Compensation	₹7.0m	₹7.0m	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. Shree Rama Multi-Tech has gone down a largely traditional route, paying Shailesh Desai a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Shree Rama Multi-Tech Limited's Growth Numbers

Over the past three years, Shree Rama Multi-Tech Limited has seen its earnings per share (EPS) grow by 58% per year. Its revenue is up 19% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Shree Rama Multi-Tech Limited Been A Good Investment?

Boasting a total shareholder return of 50% over three years, Shree Rama Multi-Tech Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Shailesh receives almost all of their compensation through a salary. Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for Shree Rama Multi-Tech (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Important note: Shree Rama Multi-Tech 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.

If you decide to trade Shree Rama Multi-Tech, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.