Here's Why Shareholders May Want To Be Cautious With Increasing PTC India Limited's (NSE:PTC) CEO Pay Packet

Key Insights

• PTC India to hold its Annual General Meeting on 27th of September
• CEO Rajib Mishra's total compensation includes salary of ₹11.0m
• Total compensation is 283% above industry average
• PTC India's EPS grew by 7.3% over the past three years while total shareholder return over the past three years was 262%

Under the guidance of CEO Rajib Mishra, PTC India Limited (NSE:PTC) 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 27th of September. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for PTC India

Comparing PTC India Limited's CEO Compensation With The Industry

At the time of writing, our data shows that PTC India Limited has a market capitalization of ₹41b, and reported total annual CEO compensation of ₹17m for the year to March 2023. That's just a smallish increase of 7.8% on last year. We note that the salary portion, which stands at ₹11.0m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Indian Renewable Energy industry with market capitalizations ranging from ₹17b to ₹66b, the reported median CEO total compensation was ₹4.3m. Hence, we can conclude that Rajib Mishra is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	₹11m	₹11m	66%
Other	₹5.6m	₹4.0m	34%
Total Compensation	₹17m	₹15m	100%

On an industry level, roughly 71% of total compensation represents salary and 30% is other remuneration. Although there is a difference in how total compensation is set, PTC India more or less reflects the market in terms of setting the salary. 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.

A Look at PTC India Limited's Growth Numbers

Over the past three years, PTC India Limited has seen its earnings per share (EPS) grow by 7.3% per year. It achieved revenue growth of 1.9% over the last year.

We'd prefer higher revenue growth, but we're happy with the modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has PTC India Limited Been A Good Investment?

We think that the total shareholder return of 262%, over three years, would leave most PTC India 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...

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, 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 2 which don't sit too well with us) in PTC India we think you should know about.

Important note: PTC India 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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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.