Increases to CEO Compensation Might Be Put On Hold For Now at Torrent Power Limited (NSE:TORNTPOWER)

Key Insights

• Torrent Power to hold its Annual General Meeting on 30th of July
• CEO Jinal Mehta's total compensation includes salary of ₹156.0m
• The overall pay is 1,114% above the industry average
• Torrent Power's total shareholder return over the past three years was 253% while its EPS grew by 12% over the past three years

Under the guidance of CEO Jinal Mehta, Torrent Power Limited (NSE:TORNTPOWER) 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 30th of July. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for Torrent Power

Comparing Torrent Power Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Torrent Power Limited has a market capitalization of ₹718b, and reported total annual CEO compensation of ₹196m for the year to March 2024. That's a modest increase of 5.5% on the prior year. In particular, the salary of ₹156.0m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Indian Electric Utilities industry with market capitalizations ranging from ₹335b to ₹1.0t, the reported median CEO total compensation was ₹16m. Hence, we can conclude that Jinal Mehta is remunerated higher than the industry median. What's more, Jinal Mehta holds ₹12m 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	₹156m	₹136m	80%
Other	₹40m	₹50m	20%
Total Compensation	₹196m	₹186m	100%

Talking in terms of the industry, salary represented approximately 45% of total compensation out of all the companies we analyzed, while other remuneration made up 55% of the pie. It's interesting to note that Torrent Power pays out a greater portion of remuneration through salary, compared to the 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 Torrent Power Limited's Growth Numbers

Over the past three years, Torrent Power Limited has seen its earnings per share (EPS) grow by 12% per year. Its revenue is up 5.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Torrent Power Limited Been A Good Investment?

Boasting a total shareholder return of 253% over three years, Torrent Power 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...

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, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Torrent Power that investors should be aware of in a dynamic business environment.

Switching gears from Torrent Power, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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