Universal Cables Limited's (NSE:UNIVCABLES) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Universal Cables will host its Annual General Meeting on 2nd of August
• CEO Y. Lodha's total compensation includes salary of ₹10.5m
• The overall pay is 70% above the industry average
• Universal Cables' total shareholder return over the past three years was 388% while its EPS grew by 17% over the past three years

CEO Y. Lodha has done a decent job of delivering relatively good performance at Universal Cables Limited (NSE:UNIVCABLES) recently. As shareholders go into the upcoming AGM on 2nd of August, 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 want to keep CEO compensation within reason.

View our latest analysis for Universal Cables

Comparing Universal Cables Limited's CEO Compensation With The Industry

Our data indicates that Universal Cables Limited has a market capitalization of ₹30b, and total annual CEO compensation was reported as ₹20m for the year to March 2024. We note that's an increase of 8.2% above last year. Notably, the salary which is ₹10.5m, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the Indian Electrical industry with market capitalizations ranging between ₹17b and ₹67b had a median total CEO compensation of ₹12m. This suggests that Y. Lodha is paid more than the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	₹10m	₹9.5m	53%
Other	₹9.1m	₹8.7m	47%
Total Compensation	₹20m	₹18m	100%

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. Universal Cables sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Universal Cables Limited's Growth

Universal Cables Limited's earnings per share (EPS) grew 17% per year over the last three years. In the last year, its revenue is down 8.2%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Universal Cables Limited Been A Good Investment?

Most shareholders would probably be pleased with Universal Cables Limited for providing a total return of 388% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Universal Cables (of which 2 are a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Important note: Universal Cables 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.

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