Increases to Onward Technologies Limited's (NSE:ONWARDTEC) CEO Compensation Might Cool off for now

Performance at Onward Technologies Limited (NSE:ONWARDTEC) has been reasonably good and CEO Jigar Mehta 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 15 July 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Onward Technologies

How Does Total Compensation For Jigar Mehta Compare With Other Companies In The Industry?

Our data indicates that Onward Technologies Limited has a market capitalization of ₹3.6b, and total annual CEO compensation was reported as ₹14m for the year to March 2021. That's a fairly small increase of 6.3% over the previous year. We note that the salary of ₹7.05m makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹2.9m. This suggests that Jigar Mehta is paid more than the median for the industry. Furthermore, Jigar Mehta directly owns ₹129m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	₹7.0m	₹3.6m	50%
Other	₹7.0m	₹9.7m	50%
Total Compensation	₹14m	₹13m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. Onward Technologies pays a modest slice of remuneration through salary, as compared to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Onward Technologies Limited's Growth

Onward Technologies Limited's earnings per share (EPS) grew 1.3% per year over the last three years. It saw its revenue drop 11% over the last year.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Onward Technologies Limited Been A Good Investment?

We think that the total shareholder return of 229%, over three years, would leave most Onward Technologies Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Onward Technologies that investors should think about before committing capital to this stock.

Important note: Onward Technologies 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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