We Think Shareholders Will Probably Be Generous With Skipper Limited's (NSE:SKIPPER) CEO Compensation

Key Insights

• Skipper's Annual General Meeting to take place on 19th of September
• Total pay for CEO Sajan Bansal includes ₹14.4m salary
• Total compensation is similar to the industry average
• Over the past three years, Skipper's EPS grew by 57% and over the past three years, the total shareholder return was 390%

We have been pretty impressed with the performance at Skipper Limited (NSE:SKIPPER) recently and CEO Sajan Bansal deserves a mention for their role in it. Coming up to the next AGM on 19th of September, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

See our latest analysis for Skipper

How Does Total Compensation For Sajan Bansal Compare With Other Companies In The Industry?

According to our data, Skipper Limited has a market capitalization of ₹46b, and paid its CEO total annual compensation worth ₹14m over the year to March 2024. This was the same amount the CEO received in the prior year. Notably, the salary of ₹14m is the entirety of the CEO compensation.

For comparison, other companies in the Indian Construction industry with market capitalizations ranging between ₹17b and ₹67b had a median total CEO compensation of ₹14m. So it looks like Skipper compensates Sajan Bansal in line with the median for the industry. Moreover, Sajan Bansal also holds ₹8.9b worth of Skipper stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹14m	₹14m	100%
Other	-	-	-
Total Compensation	₹14m	₹14m	100%

On an industry level, around 98% of total compensation represents salary and 2% is other remuneration. At the company level, Skipper pays Sajan Bansal solely through a salary, preferring to go down a conventional route. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Skipper Limited's Growth Numbers

Over the past three years, Skipper Limited has seen its earnings per share (EPS) grow by 57% per year. It achieved revenue growth of 80% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Skipper Limited Been A Good Investment?

We think that the total shareholder return of 390%, over three years, would leave most Skipper 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...

Skipper pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Skipper (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Important note: Skipper 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.