S.P. Apparels Limited's (NSE:SPAL) CEO Compensation Is Looking A Bit Stretched At The Moment

CEO Perumal Sundararajan has done a decent job of delivering relatively good performance at S.P. Apparels Limited (NSE:SPAL) recently. As shareholders go into the upcoming AGM on 13 September 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for S.P. Apparels

How Does Total Compensation For Perumal Sundararajan Compare With Other Companies In The Industry?

At the time of writing, our data shows that S.P. Apparels Limited has a market capitalization of ₹8.4b, and reported total annual CEO compensation of ₹15m for the year to March 2021. Notably, that's an increase of 28% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹15m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹3.5m. Hence, we can conclude that Perumal Sundararajan is remunerated higher than the industry median. Moreover, Perumal Sundararajan also holds ₹4.2b worth of S.P. Apparels stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	₹15m	₹12m	100%
Other	-	-	-
Total Compensation	₹15m	₹12m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. At the company level, S.P. Apparels pays Perumal Sundararajan solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at S.P. Apparels Limited's Growth Numbers

S.P. Apparels Limited's earnings per share (EPS) grew 6.4% per year over the last three years. It achieved revenue growth of 11% over the last year.

This revenue growth could really point to a brighter future. And, while modest, the EPS growth is noticeable. So while performance isn't amazing, we think it really does seem quite respectable. 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 S.P. Apparels Limited Been A Good Investment?

With a total shareholder return of 7.8% over three years, S.P. Apparels Limited has done okay by shareholders, but there's always room for improvement. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

To Conclude...

S.P. Apparels rewards its CEO solely through a salary, ignoring non-salary benefits completely. Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for S.P. Apparels that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.
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