Most Shareholders Will Probably Agree With RITES Limited's (NSE:RITES) CEO Compensation

Key Insights

• RITES to hold its Annual General Meeting on 23rd of September
• Total pay for CEO Rahul Mithal includes ₹6.54m salary
• The total compensation is 76% less than the average for the industry
• RITES' total shareholder return over the past three years was 104% while its EPS was down 13% over the past three years

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Performance at RITES Limited (NSE:RITES) has been rather uninspiring recently and shareholders may be wondering how CEO Rahul Mithal plans to fix this. At the next AGM coming up on 23rd of September, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.

Check out our latest analysis for RITES

Comparing RITES Limited's CEO Compensation With The Industry

Our data indicates that RITES Limited has a market capitalization of ₹132b, and total annual CEO compensation was reported as ₹11m for the year to March 2025. That's a notable increase of 12% on last year. Notably, the salary which is ₹6.54m, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the Indian Professional Services industry with market capitalizations ranging from ₹88b to ₹282b, the reported median CEO total compensation was ₹47m. In other words, RITES pays its CEO lower than the industry median.

On an industry level, around 92% of total compensation represents salary and 8% is other remuneration. RITES 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.

RITES Limited's Growth

Over the last three years, RITES Limited has shrunk its earnings per share by 13% per year. In the last year, its revenue is down 7.2%.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has RITES Limited Been A Good Investment?

Most shareholders would probably be pleased with RITES Limited for providing a total return of 104% over three years. 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...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for RITES that investors should think about before committing capital to this stock.

Important note: RITES 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.