Shareholders Would Not Be Objecting To The Byke Hospitality Limited's (NSE:BYKE) CEO Compensation And Here's Why

Key Insights

• Byke Hospitality will host its Annual General Meeting on 21st of September
• Total pay for CEO Anil Patodia includes ₹6.00m salary
• The total compensation is similar to the average for the industry
• Byke Hospitality's EPS grew by 123% over the past three years while total shareholder return over the past three years was 160%

It would be hard to discount the role that CEO Anil Patodia has played in delivering the impressive results at The Byke Hospitality Limited (NSE:BYKE) recently. Coming up to the next AGM on 21st of September, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders 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.

Check out our latest analysis for Byke Hospitality

Comparing The Byke Hospitality Limited's CEO Compensation With The Industry

At the time of writing, our data shows that The Byke Hospitality Limited has a market capitalization of ₹3.7b, and reported total annual CEO compensation of ₹6.0m for the year to March 2024. This was the same amount the CEO received in the prior year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹6.0m.

For comparison, other companies in the Indian Hospitality industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹5.4m. From this we gather that Anil Patodia is paid around the median for CEOs in the industry. Furthermore, Anil Patodia directly owns ₹267m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹6.0m	₹6.0m	100%
Other	-	-	-
Total Compensation	₹6.0m	₹6.0m	100%

On an industry level, roughly 94% of total compensation represents salary and 6% is other remuneration. On a company level, Byke Hospitality prefers to reward its CEO through a salary, opting not to pay Anil Patodia 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 The Byke Hospitality Limited's Growth Numbers

Over the past three years, The Byke Hospitality Limited has seen its earnings per share (EPS) grow by 123% per year. In the last year, its revenue is down 11%.

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. 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 The Byke Hospitality Limited Been A Good Investment?

We think that the total shareholder return of 160%, over three years, would leave most The Byke Hospitality 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.

In Summary...

Byke Hospitality pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Byke Hospitality that investors should be aware of in a dynamic business environment.

Important note: Byke Hospitality is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.