Increases to CEO Compensation Might Be Put On Hold For Now at Nitiraj Engineers Limited (NSE:NITIRAJ)

Key Insights

• Nitiraj Engineers will host its Annual General Meeting on 24th of September
• Salary of ₹2.40m is part of CEO Rajesh Bhatwal's total remuneration
• The total compensation is 147% higher than the average for the industry
• Nitiraj Engineers' EPS grew by 38% over the past three years while total shareholder return over the past three years was 420%

Under the guidance of CEO Rajesh Bhatwal, Nitiraj Engineers Limited (NSE:NITIRAJ) has performed reasonably well recently. As shareholders go into the upcoming AGM on 24th 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 may still want to keep CEO compensation within reason.

See our latest analysis for Nitiraj Engineers

Comparing Nitiraj Engineers Limited's CEO Compensation With The Industry

According to our data, Nitiraj Engineers Limited has a market capitalization of ₹2.4b, and paid its CEO total annual compensation worth ₹4.3m over the year to March 2024. This was the same amount the CEO received in the prior year. We note that the salary of ₹2.40m makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the Indian Electronic industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹1.7m. Accordingly, our analysis reveals that Nitiraj Engineers Limited pays Rajesh Bhatwal north of the industry median. What's more, Rajesh Bhatwal holds ₹1.1b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹2.4m	₹2.4m	56%
Other	₹1.9m	₹1.9m	44%
Total Compensation	₹4.3m	₹4.3m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. It's interesting to note that Nitiraj Engineers allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Nitiraj Engineers Limited's Growth

Nitiraj Engineers Limited has seen its earnings per share (EPS) increase by 38% a year over the past three years. In the last year, its revenue is up 85%.

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. 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 Nitiraj Engineers Limited Been A Good Investment?

Boasting a total shareholder return of 420% over three years, Nitiraj Engineers Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

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, 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 it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Nitiraj Engineers 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.

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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.