We Think S.P. Apparels Limited's (NSE:SPAL) CEO Compensation Looks Fair

Key Insights

• S.P. Apparels to hold its Annual General Meeting on 26th of September
• CEO Sundararajan Mudaliar's total compensation includes salary of ₹12.0m
• Total compensation is similar to the industry average
• S.P. Apparels' total shareholder return over the past three years was 188% while its EPS grew by 16% over the past three years

The performance at S.P. Apparels Limited (NSE:SPAL) has been quite strong recently and CEO Sundararajan Mudaliar has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 26th 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.

View our latest analysis for S.P. Apparels

How Does Total Compensation For Sundararajan Mudaliar 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 ₹23b, and reported total annual CEO compensation of ₹24m for the year to March 2024. We note that's an increase of 9.1% above last year. We note that the salary portion, which stands at ₹12.0m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Indian Luxury industry with market capitalizations ranging between ₹8.4b and ₹33b had a median total CEO compensation of ₹23m. So it looks like S.P. Apparels compensates Sundararajan Mudaliar in line with the median for the industry. Moreover, Sundararajan Mudaliar also holds ₹12b 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	2024	2023	Proportion (2024)
Salary	₹12m	₹12m	50%
Other	₹12m	₹10m	50%
Total Compensation	₹24m	₹22m	100%

Talking in terms of the industry, salary represented approximately 99% of total compensation out of all the companies we analyzed, while other remuneration made up 1% of the pie. S.P. Apparels sets aside a smaller share of compensation for salary, in comparison to the overall industry.

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

Over the past three years, S.P. Apparels Limited has seen its earnings per share (EPS) grow by 16% per year. Revenue was pretty flat on last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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?

We think that the total shareholder return of 188%, over three years, would leave most S.P. Apparels Limited 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...

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.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for S.P. Apparels that investors should think about before committing capital to this 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.