We Think Tokyo Plast International Limited's (NSE:TOKYOPLAST) CEO Compensation Looks Fair

It would be hard to discount the role that CEO Velji Shah has played in delivering the impressive results at Tokyo Plast International Limited (NSE:TOKYOPLAST) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 30 September 2022. 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. Here is our take on why we think CEO compensation is not extravagant.

View our latest analysis for Tokyo Plast International

How Does Total Compensation For Velji Shah Compare With Other Companies In The Industry?

Our data indicates that Tokyo Plast International Limited has a market capitalization of ₹948m, and total annual CEO compensation was reported as ₹4.2m for the year to March 2022. This was the same as last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹4.2m.

On comparing similar-sized companies in the industry with market capitalizations below ₹16b, we found that the median total CEO compensation was ₹4.1m. So it looks like Tokyo Plast International compensates Velji Shah in line with the median for the industry.

Component	2022	2021	Proportion (2022)
Salary	₹4.2m	₹4.2m	100%
Other	-	-	-
Total Compensation	₹4.2m	₹4.2m	100%

On an industry level, around 92% of total compensation represents salary and 8% is other remuneration. On a company level, Tokyo Plast International prefers to reward its CEO through a salary, opting not to pay Velji Shah through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Tokyo Plast International Limited's Growth Numbers

Tokyo Plast International Limited has seen its earnings per share (EPS) increase by 89% a year over the past three years. In the last year, its revenue is up 25%.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Tokyo Plast International Limited Been A Good Investment?

We think that the total shareholder return of 88%, over three years, would leave most Tokyo Plast International Limited shareholders smiling. 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.

To Conclude...

Tokyo Plast International pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Tokyo Plast International that investors should be aware of in a dynamic business environment.

Switching gears from Tokyo Plast International, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.