Increases to Torrent Power Limited's (NSE:TORNTPOWER) CEO Compensation Might Cool off for now

Key Insights

• Torrent Power will host its Annual General Meeting on 5th of August
• Salary of ₹173.1m is part of CEO Jinal Mehta's total remuneration
• The total compensation is 223% higher than the average for the industry
• Torrent Power's total shareholder return over the past three years was 169% while its EPS grew by 84% over the past three years

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CEO Jinal Mehta has done a decent job of delivering relatively good performance at Torrent Power Limited (NSE:TORNTPOWER) recently. As shareholders go into the upcoming AGM on 5th of August, 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 be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Torrent Power

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

According to our data, Torrent Power Limited has a market capitalization of ₹668b, and paid its CEO total annual compensation worth ₹223m over the year to March 2025. We note that's an increase of 14% above last year. Notably, the salary which is ₹173.1m, represents most of the total compensation being paid.

On examining similar-sized companies in the Indian Electric Utilities industry with market capitalizations between ₹347b and ₹1.0t, we discovered that the median CEO total compensation of that group was ₹69m. Accordingly, our analysis reveals that Torrent Power Limited pays Jinal Mehta north of the industry median. Furthermore, Jinal Mehta directly owns ₹11m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. Torrent Power pays out 78% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

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 84% per year. Its revenue is up 7.3% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Torrent Power Limited Been A Good Investment?

Most shareholders would probably be pleased with Torrent Power Limited for providing a total return of 169% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

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 can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Torrent Power that you should be aware of before investing.

Important note: Torrent Power 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.