This Is Why We Think Avenue Supermarts Limited's (NSE:DMART) CEO Might Get A Pay Rise Approved By Shareholders

Key Insights

• Avenue Supermarts to hold its Annual General Meeting on 29th of August
• Salary of ₹49.5m is part of CEO Ignatius Noronha's total remuneration
• The overall pay is 49% below the industry average
• Avenue Supermarts' EPS grew by 32% over the past three years while total shareholder return over the past three years was 31%

Shareholders will probably not be disappointed by the robust results at Avenue Supermarts Limited (NSE:DMART) recently and they will be keeping this in mind as they go into the AGM on 29th of August. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

See our latest analysis for Avenue Supermarts

Comparing Avenue Supermarts Limited's CEO Compensation With The Industry

According to our data, Avenue Supermarts Limited has a market capitalization of ₹3.3t, and paid its CEO total annual compensation worth ₹50m over the year to March 2024. Notably, that's an increase of 10% over the year before. We note that the salary portion, which stands at ₹49.5m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the India Consumer Retailing industry with market capitalizations over ₹671b, the reported median total CEO compensation was ₹98m. Accordingly, Avenue Supermarts pays its CEO under the industry median. Furthermore, Ignatius Noronha directly owns ₹64b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹49m	₹45m	98%
Other	₹767k	₹767k	2%
Total Compensation	₹50m	₹46m	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. Avenue Supermarts pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Avenue Supermarts Limited's Growth Numbers

Over the past three years, Avenue Supermarts Limited has seen its earnings per share (EPS) grow by 32% per year. It achieved revenue growth of 19% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Avenue Supermarts Limited Been A Good Investment?

Avenue Supermarts Limited has generated a total shareholder return of 31% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Avenue Supermarts pays its CEO a majority of compensation through a salary. Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Rather, investors would more likely want to engage on discussions related to 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 Avenue Supermarts 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.