Increases to CEO Compensation Might Be Put On Hold For Now at Tata Chemicals Limited (NSE:TATACHEM)

Key Insights

• Tata Chemicals will host its Annual General Meeting on 26th of June
• Total pay for CEO Ramakrishnan Mukundan includes ₹39.2m salary
• The total compensation is 118% higher than the average for the industry
• Tata Chemicals' EPS grew by 3.2% over the past three years while total shareholder return over the past three years was 62%

Performance at Tata Chemicals Limited (NSE:TATACHEM) has been reasonably good and CEO Ramakrishnan Mukundan 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 26th of June. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for Tata Chemicals

Comparing Tata Chemicals Limited's CEO Compensation With The Industry

Our data indicates that Tata Chemicals Limited has a market capitalization of ₹282b, and total annual CEO compensation was reported as ₹83m for the year to March 2024. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹39m.

In comparison with other companies in the Indian Chemicals industry with market capitalizations ranging from ₹167b to ₹534b, the reported median CEO total compensation was ₹38m. This suggests that Ramakrishnan Mukundan is paid more than the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	₹39m	₹35m	47%
Other	₹43m	₹47m	53%
Total Compensation	₹83m	₹82m	100%

Speaking on an industry level, nearly 86% of total compensation represents salary, while the remainder of 14% is other remuneration. It's interesting to note that Tata Chemicals allocates a smaller portion of compensation to salary in comparison 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.

Tata Chemicals Limited's Growth

Over the past three years, Tata Chemicals Limited has seen its earnings per share (EPS) grow by 3.2% per year. In the last year, its revenue is down 8.1%.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Tata Chemicals Limited Been A Good Investment?

Most shareholders would probably be pleased with Tata Chemicals Limited for providing a total return of 62% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for Tata Chemicals that investors should be aware of in a dynamic business environment.

Switching gears from Tata Chemicals, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.

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