We Think Chalet Hotels Limited's (NSE:CHALET) CEO Compensation Looks Fair

Key Insights

• Chalet Hotels' Annual General Meeting to take place on 8th of August
• Total pay for CEO Sanjay Sethi includes ₹41.9m salary
• The total compensation is similar to the average for the industry
• Over the past three years, Chalet Hotels' EPS grew by 102% and over the past three years, the total shareholder return was 393%

The performance at Chalet Hotels Limited (NSE:CHALET) has been quite strong recently and CEO Sanjay Sethi has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 8th of August. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

Check out our latest analysis for Chalet Hotels

How Does Total Compensation For Sanjay Sethi Compare With Other Companies In The Industry?

Our data indicates that Chalet Hotels Limited has a market capitalization of ₹184b, and total annual CEO compensation was reported as ₹48m for the year to March 2024. That is, the compensation was roughly the same as last year. In particular, the salary of ₹41.9m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Indian Hospitality industry with market capitalizations ranging from ₹84b to ₹268b, the reported median CEO total compensation was ₹38m. So it looks like Chalet Hotels compensates Sanjay Sethi in line with the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	₹42m	₹38m	86%
Other	₹6.6m	₹11m	14%
Total Compensation	₹48m	₹49m	100%

Talking in terms of the industry, salary represented approximately 92% of total compensation out of all the companies we analyzed, while other remuneration made up 8% of the pie. Our data reveals that Chalet Hotels allocates salary more or less in line with the wider market. 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 Chalet Hotels Limited's Growth Numbers

Over the past three years, Chalet Hotels Limited has seen its earnings per share (EPS) grow by 102% per year. It achieved revenue growth of 23% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Chalet Hotels Limited Been A Good Investment?

We think that the total shareholder return of 393%, over three years, would leave most Chalet Hotels 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...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which is a bit unpleasant) in Chalet Hotels we think you should know about.

Switching gears from Chalet Hotels, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com