Liberty Shoes Ltd.'s (NSE:LIBERTSHOE) CEO Looks Like They Deserve Their Pay Packet

Key Insights

• Liberty Shoes will host its Annual General Meeting on 30th of September
• CEO Adesh Gupta's total compensation includes salary of ₹4.80m
• Total compensation is similar to the industry average
• Over the past three years, Liberty Shoes' EPS grew by 81% and over the past three years, the total shareholder return was 83%

The performance at Liberty Shoes Ltd. (NSE:LIBERTSHOE) has been quite strong recently and CEO Adesh Gupta has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 30th of September. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

See our latest analysis for Liberty Shoes

How Does Total Compensation For Adesh Gupta Compare With Other Companies In The Industry?

At the time of writing, our data shows that Liberty Shoes Ltd. has a market capitalization of ₹4.2b, and reported total annual CEO compensation of ₹4.8m for the year to March 2023. That's just a smallish increase of 4.3% on last year. Notably, the salary of ₹4.8m is the entirety of the CEO compensation.

On comparing similar-sized companies in the Indian Luxury industry with market capitalizations below ₹17b, we found that the median total CEO compensation was ₹3.9m. From this we gather that Adesh Gupta is paid around the median for CEOs in the industry. Furthermore, Adesh Gupta directly owns ₹191m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	₹4.8m	₹4.6m	100%
Other	-	-	-
Total Compensation	₹4.8m	₹4.6m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. On a company level, Liberty Shoes prefers to reward its CEO through a salary, opting not to pay Adesh Gupta through non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Liberty Shoes Ltd.'s Growth Numbers

Liberty Shoes Ltd.'s earnings per share (EPS) grew 81% per year over the last three years. In the last year, its revenue is up 15%.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Liberty Shoes Ltd. Been A Good Investment?

We think that the total shareholder return of 83%, over three years, would leave most Liberty Shoes Ltd. 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...

Liberty Shoes pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Liberty Shoes you should be aware of, and 1 of them is significant.

Important note: Liberty Shoes 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.