It's Unlikely That Nitiraj Engineers Limited's (NSE:NITIRAJ) CEO Will See A Huge Pay Rise This Year

Key Insights

• Nitiraj Engineers' Annual General Meeting to take place on 25th of September
• Salary of ₹2.40m is part of CEO Rajesh Bhatwal's total remuneration
• The total compensation is 138% higher than the average for the industry
• Over the past three years, Nitiraj Engineers' EPS fell by 12% and over the past three years, the total shareholder return was 106%

Under the guidance of CEO Rajesh Bhatwal, Nitiraj Engineers Limited (NSE:NITIRAJ) has performed reasonably well recently. 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 25th of September. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Nitiraj Engineers

How Does Total Compensation For Rajesh Bhatwal Compare With Other Companies In The Industry?

According to our data, Nitiraj Engineers Limited has a market capitalization of ₹1.1b, and paid its CEO total annual compensation worth ₹4.3m over the year to March 2023. That's mostly flat as compared to the prior year's compensation. In particular, the salary of ₹2.40m, makes up a fairly large portion of the total compensation being paid to the CEO.

For comparison, other companies in the Indian Electronic industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹1.8m. Accordingly, our analysis reveals that Nitiraj Engineers Limited pays Rajesh Bhatwal north of the industry median. Furthermore, Rajesh Bhatwal directly owns ₹497m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	₹2.4m	₹2.4m	56%
Other	₹1.9m	₹1.9m	44%
Total Compensation	₹4.3m	₹4.3m	100%

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. Nitiraj Engineers sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Nitiraj Engineers Limited's Growth Numbers

Over the last three years, Nitiraj Engineers Limited has shrunk its earnings per share by 12% per year. Its revenue is up 19% over the last year.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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?

We think that the total shareholder return of 106%, over three years, would leave most Nitiraj Engineers 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...

The overall company performance has been commendable, however there are still areas for improvement. EPS growth is still weak, and until that picks up, shareholders may find it hard to approve a pay rise for the CEO, since they are already paid above the average in their industry.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Nitiraj Engineers (1 is a bit unpleasant!) that you should be aware of before investing here.

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.