Why We Think La Opala RG Limited's (NSE:LAOPALA) CEO Compensation Is Not Excessive At All

Performance at La Opala RG Limited (NSE:LAOPALA) has been reasonably good and CEO Ajit Jhunjhunwala 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 29 September 2022. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

View our latest analysis for La Opala RG

Comparing La Opala RG Limited's CEO Compensation With The Industry

Our data indicates that La Opala RG Limited has a market capitalization of ₹40b, and total annual CEO compensation was reported as ₹39m for the year to March 2022. We note that's an increase of 73% above last year. Notably, the salary which is ₹23.3m, represents a considerable chunk of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from ₹16b to ₹64b, we found that the median CEO total compensation was ₹37m. From this we gather that Ajit Jhunjhunwala is paid around the median for CEOs in the industry. Furthermore, Ajit Jhunjhunwala directly owns ₹3.5b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	₹23m	₹17m	59%
Other	₹16m	₹5.5m	41%
Total Compensation	₹39m	₹23m	100%

Speaking on an industry level, nearly 93% of total compensation represents salary, while the remainder of 7% is other remuneration. La Opala RG pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at La Opala RG Limited's Growth Numbers

La Opala RG Limited's earnings per share (EPS) grew 7.3% per year over the last three years. It achieved revenue growth of 60% over the last year.

It's great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! 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 La Opala RG Limited Been A Good Investment?

Boasting a total shareholder return of 95% over three years, La Opala RG Limited has done well by shareholders. 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...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus 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.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at La Opala RG.

Important note: La Opala RG 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.