Shareholders May Not Be So Generous With Sree Rayalaseema Hi-Strength Hypo Limited's (NSE:SRHHYPOLTD) CEO Compensation And Here's Why

Performance at Sree Rayalaseema Hi-Strength Hypo Limited (NSE:SRHHYPOLTD) has been reasonably good and CEO Tumbalam Bharath has done a decent job of steering the company in the right direction. 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 be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Sree Rayalaseema Hi-Strength Hypo

How Does Total Compensation For Tumbalam Bharath Compare With Other Companies In The Industry?

According to our data, Sree Rayalaseema Hi-Strength Hypo Limited has a market capitalization of ₹15b, and paid its CEO total annual compensation worth ₹71m over the year to March 2022. That's a notable increase of 71% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹71m.

For comparison, other companies in the same industry with market capitalizations ranging between ₹8.0b and ₹32b had a median total CEO compensation of ₹18m. This suggests that Tumbalam Bharath is paid more than the median for the industry. Moreover, Tumbalam Bharath also holds ₹785m worth of Sree Rayalaseema Hi-Strength Hypo 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	₹71m	₹42m	100%
Other	-	-	-
Total Compensation	₹71m	₹42m	100%

Talking in terms of the industry, salary represented approximately 86% of total compensation out of all the companies we analyzed, while other remuneration made up 14% of the pie. At the company level, Sree Rayalaseema Hi-Strength Hypo pays Tumbalam Bharath solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Sree Rayalaseema Hi-Strength Hypo Limited's Growth

Over the past three years, Sree Rayalaseema Hi-Strength Hypo Limited has seen its earnings per share (EPS) grow by 76% per year. Its revenue is up 55% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Sree Rayalaseema Hi-Strength Hypo Limited Been A Good Investment?

Boasting a total shareholder return of 679% over three years, Sree Rayalaseema Hi-Strength Hypo Limited has done well by shareholders. 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...

Sree Rayalaseema Hi-Strength Hypo rewards its CEO solely through a salary, ignoring non-salary benefits completely. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which is potentially serious) in Sree Rayalaseema Hi-Strength Hypo we think you should know about.

Important note: Sree Rayalaseema Hi-Strength Hypo 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.