We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Relaxo Footwears Limited's (NSE:RELAXO) CEO For Now

Simply Wall St
August 19, 2021
Source: Shutterstock

CEO Ramesh Dua has done a decent job of delivering relatively good performance at Relaxo Footwears Limited (NSE:RELAXO) recently. 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 26 August 2021. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Relaxo Footwears

How Does Total Compensation For Ramesh Dua Compare With Other Companies In The Industry?

According to our data, Relaxo Footwears Limited has a market capitalization of ₹300b, and paid its CEO total annual compensation worth ₹204m over the year to March 2021. Notably, that's an increase of 37% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹18m.

In comparison with other companies in the industry with market capitalizations ranging from ₹149b to ₹475b, the reported median CEO total compensation was ₹20m. Accordingly, our analysis reveals that Relaxo Footwears Limited pays Ramesh Dua north of the industry median. What's more, Ramesh Dua holds ₹84b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary ₹18m ₹18m 9%
Other ₹186m ₹131m 91%
Total Compensation₹204m ₹149m100%

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. Relaxo Footwears sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

NSEI:RELAXO CEO Compensation August 20th 2021

Relaxo Footwears Limited's Growth

Over the past three years, Relaxo Footwears Limited has seen its earnings per share (EPS) grow by 19% per year. In the last year, its revenue is up 17%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Relaxo Footwears Limited Been A Good Investment?

Boasting a total shareholder return of 188% over three years, Relaxo Footwears Limited has done well by shareholders. 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...

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. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Relaxo Footwears that investors should look into moving forward.

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 Relaxo Footwears, 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

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.