Here's Why Filatex India Limited's (NSE:FILATEX) CEO Compensation Is The Least Of Shareholders' Concerns

Key Insights

• Filatex India's Annual General Meeting to take place on 26th of September
• CEO Madhu Bhageria's total compensation includes salary of ₹12.4m
• The overall pay is comparable to the industry average
• Filatex India's total shareholder return over the past three years was 15% while its EPS was down 21% over the past three years

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Despite positive share price growth of 15% for Filatex India Limited (NSE:FILATEX) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 26th of September. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

See our latest analysis for Filatex India

Comparing Filatex India Limited's CEO Compensation With The Industry

According to our data, Filatex India Limited has a market capitalization of ₹25b, and paid its CEO total annual compensation worth ₹21m over the year to March 2025. We note that's an increase of 16% above last year. Notably, the salary which is ₹12.4m, represents most of the total compensation being paid.

On comparing similar companies from the Indian Luxury industry with market caps ranging from ₹8.8b to ₹35b, we found that the median CEO total compensation was ₹16m. This suggests that Filatex India remunerates its CEO largely in line with the industry average. Moreover, Madhu Bhageria also holds ₹2.8b worth of Filatex India stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 99% of total compensation represents salary and 1% is other remuneration. In Filatex India's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Filatex India Limited's Growth

Over the last three years, Filatex India Limited has shrunk its earnings per share by 21% per year. Revenue was pretty flat on last year.

Overall this is not a very positive result for shareholders. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Filatex India Limited Been A Good Investment?

Filatex India Limited has generated a total shareholder return of 15% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for Filatex India (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

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.

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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.