Shareholders Will Probably Hold Off On Increasing Larsen & Toubro Limited's (NSE:LT) CEO Compensation For The Time Being

Key Insights

• Larsen & Toubro to hold its Annual General Meeting on 17th of June
• Salary of ₹39.6m is part of CEO SNS Subrahmanyan's total remuneration
• The total compensation is 5,924% higher than the average for the industry
• Larsen & Toubro's EPS grew by 20% over the past three years while total shareholder return over the past three years was 148%

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Performance at Larsen & Toubro Limited (NSE:LT) has been reasonably good and CEO SNS Subrahmanyan has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 17th of June, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Larsen & Toubro

How Does Total Compensation For SNS Subrahmanyan Compare With Other Companies In The Industry?

According to our data, Larsen & Toubro Limited has a market capitalization of ₹5.1t, and paid its CEO total annual compensation worth ₹763m over the year to March 2025. We note that's an increase of 49% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹40m.

On comparing similar companies in the Indian Construction industry with market capitalizations above ₹685b, we found that the median total CEO compensation was ₹13m. Accordingly, our analysis reveals that Larsen & Toubro Limited pays SNS Subrahmanyan north of the industry median. Moreover, SNS Subrahmanyan also holds ₹977m worth of Larsen & Toubro stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 100% of total compensation out of all the companies we analyzed, while other remuneration made up 0.14803849% of the pie. In Larsen & Toubro's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Larsen & Toubro Limited's Growth Numbers

Larsen & Toubro Limited has seen its earnings per share (EPS) increase by 20% a year over the past three years. In the last year, its revenue is up 15%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Larsen & Toubro Limited Been A Good Investment?

Most shareholders would probably be pleased with Larsen & Toubro Limited for providing a total return of 148% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

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.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which is potentially serious) in Larsen & Toubro we think you should know about.

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.