Why We Think The CEO Of MSTC Limited (NSE:MSTCLTD) May Soon See A Pay Rise

Key Insights

• MSTC will host its Annual General Meeting on 20th of September
• CEO Surinder Gupta's total compensation includes salary of ₹7.92m
• The overall pay is 66% below the industry average
• MSTC's EPS grew by 54% over the past three years while total shareholder return over the past three years was 177%

Shareholders will be pleased by the impressive results for MSTC Limited (NSE:MSTCLTD) recently and CEO Surinder Gupta has played a key role. At the upcoming AGM on 20th of September, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

Check out our latest analysis for MSTC

How Does Total Compensation For Surinder Gupta Compare With Other Companies In The Industry?

Our data indicates that MSTC Limited has a market capitalization of ₹29b, and total annual CEO compensation was reported as ₹8.9m for the year to March 2023. We note that's an increase of 34% above last year. We note that the salary portion, which stands at ₹7.92m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the India Trade Distributors industry with market capitalizations ranging from ₹17b to ₹66b, the reported median CEO total compensation was ₹26m. This suggests that Surinder Gupta is paid below the industry median.

Component	2023	2022	Proportion (2023)
Salary	₹7.9m	₹5.4m	89%
Other	₹954k	₹1.3m	11%
Total Compensation	₹8.9m	₹6.6m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. MSTC pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

MSTC Limited's Growth

MSTC Limited's earnings per share (EPS) grew 54% per year over the last three years. In the last year, its revenue is down 9.3%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has MSTC Limited Been A Good Investment?

We think that the total shareholder return of 177%, over three years, would leave most MSTC Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for MSTC that investors should look into moving forward.

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.