Shareholders May Be More Conservative With Sunflag Iron and Steel Company Limited's (NSE:SUNFLAG) CEO Compensation For Now

Key Insights

• Sunflag Iron and Steel to hold its Annual General Meeting on 21st of September
• Salary of ₹22.5m is part of CEO Pranav Bhardwaj's total remuneration
• Total compensation is 156% above industry average
• Over the past three years, Sunflag Iron and Steel's EPS grew by 44% and over the past three years, the total shareholder return was 355%

Performance at Sunflag Iron and Steel Company Limited (NSE:SUNFLAG) has been reasonably good and CEO Pranav Bhardwaj has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 21st of September, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Sunflag Iron and Steel

How Does Total Compensation For Pranav Bhardwaj Compare With Other Companies In The Industry?

At the time of writing, our data shows that Sunflag Iron and Steel Company Limited has a market capitalization of ₹37b, and reported total annual CEO compensation of ₹75m for the year to March 2023. That's a notable increase of 34% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹22m.

On comparing similar companies from the Indian Metals and Mining industry with market caps ranging from ₹17b to ₹66b, we found that the median CEO total compensation was ₹29m. Accordingly, our analysis reveals that Sunflag Iron and Steel Company Limited pays Pranav Bhardwaj north of the industry median. What's more, Pranav Bhardwaj holds ₹330m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	₹22m	₹22m	30%
Other	₹52m	₹34m	70%
Total Compensation	₹75m	₹56m	100%

Speaking on an industry level, nearly 100% of total compensation represents salary, while the remainder of 0.1213% is other remuneration. Sunflag Iron and Steel sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Sunflag Iron and Steel Company Limited's Growth

Sunflag Iron and Steel Company Limited's earnings per share (EPS) grew 44% per year over the last three years. It achieved revenue growth of 15% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, 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 Sunflag Iron and Steel Company Limited Been A Good Investment?

We think that the total shareholder return of 355%, over three years, would leave most Sunflag Iron and Steel Company 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.

In Summary...

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, 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 compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Sunflag Iron and Steel that investors should think about before committing capital to this stock.

Important note: Sunflag Iron and Steel 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.