Shareholders May Be More Conservative With Vardhman Textiles Limited's (NSE:VTL) CEO Compensation For Now

Key Insights

• Vardhman Textiles' Annual General Meeting to take place on 30th of September
• Salary of ₹8.54m is part of CEO Shri Oswal's total remuneration
• The total compensation is 330% higher than the average for the industry
• Vardhman Textiles' EPS grew by 14% over the past three years while total shareholder return over the past three years was 162%

Under the guidance of CEO Shri Oswal, Vardhman Textiles Limited (NSE:VTL) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 30th of September. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Vardhman Textiles

How Does Total Compensation For Shri Oswal Compare With Other Companies In The Industry?

Our data indicates that Vardhman Textiles Limited has a market capitalization of ₹114b, and total annual CEO compensation was reported as ₹206m for the year to March 2023. Notably, that's a decrease of 53% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹8.5m.

In comparison with other companies in the Indian Luxury industry with market capitalizations ranging from ₹83b to ₹266b, the reported median CEO total compensation was ₹48m. Accordingly, our analysis reveals that Vardhman Textiles Limited pays Shri Oswal north of the industry median. What's more, Shri Oswal holds ₹1.2b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	₹8.5m	₹6.1m	4%
Other	₹198m	₹428m	96%
Total Compensation	₹206m	₹434m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to Shri Oswal as compared to non-salary compensation over the one-year period examined. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Vardhman Textiles Limited's Growth Numbers

Over the past three years, Vardhman Textiles Limited has seen its earnings per share (EPS) grow by 14% per year. Its revenue is down 8.2% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Moving away from current form for a second, 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?

Boasting a total shareholder return of 162% over three years, Vardhman Textiles Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Vardhman Textiles prefers rewarding its CEO through non-salary benefits. Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus 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. That's why we did some digging and identified 2 warning signs for Vardhman Textiles that you should be aware of before investing.

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.