Why We Think Shyam Metalics and Energy Limited's (NSE:SHYAMMETL) CEO Compensation Is Not Excessive At All

Key Insights

• Shyam Metalics and Energy will host its Annual General Meeting on 6th of September
• Total pay for CEO Sanjay Agarwal includes ₹6.00m salary
• Total compensation is 78% below industry average
• Over the past three years, Shyam Metalics and Energy's EPS fell by 8.6% and over the past three years, the total shareholder return was 111%

Performance at Shyam Metalics and Energy Limited (NSE:SHYAMMETL) has been rather uninspiring recently and shareholders may be wondering how CEO Sanjay Agarwal plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 6th of September. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

View our latest analysis for Shyam Metalics and Energy

Comparing Shyam Metalics and Energy Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Shyam Metalics and Energy Limited has a market capitalization of ₹222b, and reported total annual CEO compensation of ₹6.0m for the year to March 2024. Notably, that's an increase of 33% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹6.0m.

In comparison with other companies in the Indian Metals and Mining industry with market capitalizations ranging from ₹168b to ₹536b, the reported median CEO total compensation was ₹28m. That is to say, Sanjay Agarwal is paid under the industry median. Furthermore, Sanjay Agarwal directly owns ₹27m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹6.0m	₹4.5m	100%
Other	-	-	-
Total Compensation	₹6.0m	₹4.5m	100%

On an industry level, around 100% of total compensation represents salary and 0.13148642% is other remuneration. At the company level, Shyam Metalics and Energy pays Sanjay Agarwal solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Shyam Metalics and Energy Limited's Growth

Shyam Metalics and Energy Limited has reduced its earnings per share by 8.6% a year over the last three years. It achieved revenue growth of 6.1% over the last year.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Shyam Metalics and Energy Limited Been A Good Investment?

We think that the total shareholder return of 111%, over three years, would leave most Shyam Metalics and Energy Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Shyam Metalics and Energy rewards its CEO solely through a salary, ignoring non-salary benefits completely. Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean these strong returns may not continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

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. That's why we did some digging and identified 2 warning signs for Shyam Metalics and Energy that investors should think about before committing capital to this stock.

Important note: Shyam Metalics and Energy 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.