Voltas Limited's (NSE:VOLTAS) CEO Compensation Looks Acceptable To Us And Here's Why

Performance at Voltas Limited (NSE:VOLTAS) has been reasonably good and CEO Pradeep Bakshi has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 27 August 2021. We present our case of why we think CEO compensation looks fair.

See our latest analysis for Voltas

How Does Total Compensation For Pradeep Bakshi Compare With Other Companies In The Industry?

According to our data, Voltas Limited has a market capitalization of ₹324b, and paid its CEO total annual compensation worth ₹44m over the year to March 2021. Notably, that's an increase of 62% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹8.4m.

For comparison, other companies in the same industry with market capitalizations ranging between ₹149b and ₹476b had a median total CEO compensation of ₹46m. This suggests that Voltas remunerates its CEO largely in line with the industry average.

Component	2021	2020	Proportion (2021)
Salary	₹8.4m	₹8.4m	19%
Other	₹36m	₹19m	81%
Total Compensation	₹44m	₹27m	100%

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. It's interesting to note that Voltas allocates a smaller portion of compensation to salary 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 Voltas Limited's Growth Numbers

Voltas Limited saw earnings per share stay pretty flat over the last three years. Its revenue is up 28% over the last year.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Voltas Limited Been A Good Investment?

We think that the total shareholder return of 63%, over three years, would leave most Voltas Limited shareholders smiling. 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.

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. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

So you may want to check if insiders are buying Voltas shares with their own money (free access).

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

If you’re looking to trade Voltas, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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