Here's Why Shareholders May Want To Be Cautious With Increasing Delta Corp Limited's (NSE:DELTACORP) CEO Pay Packet

Key Insights

• Delta's Annual General Meeting to take place on 23rd of August
• CEO Ashish Kapadia's total compensation includes salary of ₹18.9m
• The total compensation is similar to the average for the industry
• Over the past three years, Delta's EPS grew by 49% and over the past three years, the total loss to shareholders 26%

The underwhelming share price performance of Delta Corp Limited (NSE:DELTACORP) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 23rd of August could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for Delta

Comparing Delta Corp Limited's CEO Compensation With The Industry

Our data indicates that Delta Corp Limited has a market capitalization of ₹33b, and total annual CEO compensation was reported as ₹55m for the year to March 2024. That's a notable increase of 25% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹19m.

On examining similar-sized companies in the Indian Hospitality industry with market capitalizations between ₹17b and ₹67b, we discovered that the median CEO total compensation of that group was ₹49m. This suggests that Delta remunerates its CEO largely in line with the industry average.

Component	2024	2023	Proportion (2024)
Salary	₹19m	₹17m	34%
Other	₹36m	₹27m	66%
Total Compensation	₹55m	₹44m	100%

Speaking on an industry level, nearly 91% of total compensation represents salary, while the remainder of 9% is other remuneration. In Delta's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Delta Corp Limited's Growth Numbers

Over the past three years, Delta Corp Limited has seen its earnings per share (EPS) grow by 49% per year. It saw its revenue drop 19% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Delta Corp Limited Been A Good Investment?

Given the total shareholder loss of 26% over three years, many shareholders in Delta Corp Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Delta that investors should look into moving forward.

Important note: Delta 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.