Here's Why Shareholders May Want To Be Cautious With Increasing Royal Orchid Hotels Limited's (NSE:ROHLTD) CEO Pay Packet

CEO Chander Baljee has done a decent job of delivering relatively good performance at Royal Orchid Hotels Limited (NSE:ROHLTD) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 27 September 2022. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Royal Orchid Hotels

How Does Total Compensation For Chander Baljee Compare With Other Companies In The Industry?

According to our data, Royal Orchid Hotels Limited has a market capitalization of ₹7.0b, and paid its CEO total annual compensation worth ₹21m over the year to March 2022. That's a notable increase of 45% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹21m.

For comparison, other companies in the industry with market capitalizations below ₹16b, reported a median total CEO compensation of ₹3.8m. Hence, we can conclude that Chander Baljee is remunerated higher than the industry median. What's more, Chander Baljee holds ₹3.0b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2022	2021	Proportion (2022)
Salary	₹21m	₹14m	100%
Other	-	-	-
Total Compensation	₹21m	₹14m	100%

On an industry level, around 99% of total compensation represents salary and 1% is other remuneration. At the company level, Royal Orchid Hotels pays Chander Baljee solely through a salary, preferring to go down a conventional route. 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 Royal Orchid Hotels Limited's Growth Numbers

Over the past three years, Royal Orchid Hotels Limited has seen its earnings per share (EPS) grow by 58% per year. In the last year, its revenue is up 103%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Royal Orchid Hotels Limited Been A Good Investment?

Boasting a total shareholder return of 175% over three years, Royal Orchid Hotels Limited has done well by shareholders. 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...

Royal Orchid Hotels pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 5 warning signs for Royal Orchid Hotels you should be aware of, and 1 of them shouldn't be ignored.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.