Shri Oswal has been the CEO of Vardhman Textiles Limited (NSE:VTL) since 2005. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Vardhman Textiles
How Does Shri Oswal's Compensation Compare With Similar Sized Companies?
According to our data, Vardhman Textiles Limited has a market capitalization of ₹58b, and paid its CEO total annual compensation worth ₹188m over the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at ₹4.8m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from ₹29b to ₹116b, we found the median CEO total compensation was ₹29m.
It would therefore appear that Vardhman Textiles Limited pays Shri Oswal more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Vardhman Textiles has changed from year to year.
Is Vardhman Textiles Limited Growing?
Over the last three years Vardhman Textiles Limited has shrunk its earnings per share by an average of 6.5% per year (measured with a line of best fit). In the last year, its revenue is up 4.3%.
Sadly for shareholders, earnings per share are actually down, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Vardhman Textiles Limited Been A Good Investment?
Since shareholders would have lost about 22% over three years, some Vardhman Textiles Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We examined the amount Vardhman Textiles Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
We think many shareholders would be underwhelmed with the business growth over the last three years. Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Vardhman Textiles shares (free trial).
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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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