Shareholders Will Probably Hold Off On Increasing Nazara Technologies Limited's (NSE:NAZARA) CEO Compensation For The Time Being

Key Insights

• Nazara Technologies to hold its Annual General Meeting on 30th of September
• Total pay for CEO Nitish Mittersain includes ₹29.0m salary
• The total compensation is 120% higher than the average for the industry
• Over the past three years, Nazara Technologies' EPS grew by 10% and over the past three years, the total loss to shareholders 7.3%

As many shareholders of Nazara Technologies Limited (NSE:NAZARA) will be aware, they have not made a gain on their investment in the past three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 30th of September. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Nazara Technologies

How Does Total Compensation For Nitish Mittersain Compare With Other Companies In The Industry?

At the time of writing, our data shows that Nazara Technologies Limited has a market capitalization of ₹80b, and reported total annual CEO compensation of ₹39m for the year to March 2024. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at ₹29.0m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the Indian Entertainment industry with market caps ranging from ₹33b to ₹134b, we found that the median CEO total compensation was ₹18m. Accordingly, our analysis reveals that Nazara Technologies Limited pays Nitish Mittersain north of the industry median. Moreover, Nitish Mittersain also holds ₹2.1b worth of Nazara Technologies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹29m	₹27m	73%
Other	₹10m	₹12m	27%
Total Compensation	₹39m	₹40m	100%

On an industry level, around 100% of total compensation represents salary and 0.08863636% is other remuneration. In Nazara Technologies' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Nazara Technologies Limited's Growth Numbers

Over the past three years, Nazara Technologies Limited has seen its earnings per share (EPS) grow by 10% per year. It achieved revenue growth of 1.0% 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 modest revenue growth, suggesting the underlying business is healthy. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Nazara Technologies Limited Been A Good Investment?

Since shareholders would have lost about 7.3% over three years, some Nazara Technologies Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Nazara Technologies 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.

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

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.