Shareholders May Not Be So Generous With Univastu India Limited's (NSE:UNIVASTU) CEO Compensation And Here's Why

Key Insights

• Univastu India's Annual General Meeting to take place on 28th of September
• CEO Pradeep Khandagale's total compensation includes salary of ₹4.20m
• Total compensation is 40% above industry average
• Over the past three years, Univastu India's EPS fell by 15% and over the past three years, the total shareholder return was 343%

Under the guidance of CEO Pradeep Khandagale, Univastu India Limited (NSE:UNIVASTU) has performed reasonably well recently. As shareholders go into the upcoming AGM on 28th of September, 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.

See our latest analysis for Univastu India

Comparing Univastu India Limited's CEO Compensation With The Industry

According to our data, Univastu India Limited has a market capitalization of ₹2.4b, and paid its CEO total annual compensation worth ₹4.2m over the year to March 2024. This was the same amount the CEO received in the prior year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹4.2m.

In comparison with other companies in the Indian Construction industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹3.0m. Hence, we can conclude that Pradeep Khandagale is remunerated higher than the industry median. Moreover, Pradeep Khandagale also holds ₹1.6b worth of Univastu India 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	₹4.2m	₹4.2m	100%
Other	-	-	-
Total Compensation	₹4.2m	₹4.2m	100%

On an industry level, roughly 98% of total compensation represents salary and 2% is other remuneration. On a company level, Univastu India prefers to reward its CEO through a salary, opting not to pay Pradeep Khandagale through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Univastu India Limited's Growth Numbers

Over the last three years, Univastu India Limited has shrunk its earnings per share by 15% per year. It achieved revenue growth of 29% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Univastu India Limited Been A Good Investment?

We think that the total shareholder return of 343%, over three years, would leave most Univastu India 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...

Univastu India pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Some shareholders will be pleased by the relatively good results, however, the results could still be improved. We still think that some shareholders will be hesitant of increasing CEO pay until EPS growth improves, since they are already paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Univastu India that investors should be aware of in a dynamic business environment.

Switching gears from Univastu India, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.