Shareholders Will Probably Hold Off On Increasing Royal Orchid Hotels Limited's (NSE:ROHLTD) CEO Compensation For The Time Being

Key Insights

• Royal Orchid Hotels to hold its Annual General Meeting on 25th of September
• CEO Chander Baljee's total compensation includes salary of ₹27.8m
• The overall pay is 587% above the industry average
• Royal Orchid Hotels' total shareholder return over the past three years was 357% while its EPS grew by 98% over the past three years

CEO Chander Baljee has done a decent job of delivering relatively good performance at Royal Orchid Hotels Limited (NSE:ROHLTD) recently. As shareholders go into the upcoming AGM on 25th of September, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Royal Orchid Hotels

Comparing Royal Orchid Hotels Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Royal Orchid Hotels Limited has a market capitalization of ₹8.2b, and reported total annual CEO compensation of ₹28m for the year to March 2023. Notably, that's an increase of 33% over the year before. Notably, the salary of ₹28m is the entirety of the CEO compensation.

In comparison with other companies in the Indian Hospitality industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹4.0m. Accordingly, our analysis reveals that Royal Orchid Hotels Limited pays Chander Baljee north of the industry median. Moreover, Chander Baljee also holds ₹3.2b worth of Royal Orchid Hotels stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	₹28m	₹21m	100%
Other	-	-	-
Total Compensation	₹28m	₹21m	100%

Speaking on an industry level, nearly 95% of total compensation represents salary, while the remainder of 5% 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 total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Royal Orchid Hotels Limited's Growth

Royal Orchid Hotels Limited's earnings per share (EPS) grew 98% per year over the last three years. It achieved revenue growth of 47% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Royal Orchid Hotels Limited Been A Good Investment?

Boasting a total shareholder return of 357% over three years, Royal Orchid Hotels Limited has done well by shareholders. 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...

Royal Orchid Hotels rewards its CEO solely through a salary, ignoring non-salary benefits completely. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

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 4 warning signs for Royal Orchid Hotels that investors should be aware of in a dynamic business environment.

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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