Shareholders Will Probably Hold Off On Increasing Vardhman Textiles Limited's (NSE:VTL) CEO Compensation For The Time Being

CEO Shri Oswal has done a decent job of delivering relatively good performance at Vardhman Textiles Limited (NSE:VTL) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 28 September 2021. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Vardhman Textiles

Comparing Vardhman Textiles Limited's CEO Compensation With the industry

Our data indicates that Vardhman Textiles Limited has a market capitalization of ₹104b, and total annual CEO compensation was reported as ₹92m for the year to March 2021. That's a notable increase of 42% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹6.0m.

On examining similar-sized companies in the industry with market capitalizations between ₹74b and ₹236b, we discovered that the median CEO total compensation of that group was ₹30m. This suggests that Shri Oswal is paid more than the median for the industry. What's more, Shri Oswal holds ₹1.1b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	₹6.0m	₹5.8m	6%
Other	₹86m	₹59m	94%
Total Compensation	₹92m	₹65m	100%

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. Vardhman Textiles sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Vardhman Textiles Limited's Growth

Vardhman Textiles Limited's earnings per share (EPS) grew 10.0% per year over the last three years. In the last year, its revenue is up 23%.

This revenue growth could really point to a brighter future. And, while modest, the EPS growth is noticeable. Although we'll stop short of calling the stock a top performer, we think the company has potential. 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 Vardhman Textiles Limited Been A Good Investment?

We think that the total shareholder return of 83%, over three years, would leave most Vardhman Textiles 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...

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. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

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 Vardhman Textiles that investors should be aware of in a dynamic business environment.

Switching gears from Vardhman Textiles, 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.
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