Here's Why Shareholders May Want To Be Cautious With Increasing TAJGVK Hotels & Resorts Limited's (NSE:TAJGVK) CEO Pay Packet

Key Insights

• TAJGVK Hotels & Resorts' Annual General Meeting to take place on 17th of August
• Salary of ₹40.2m is part of CEO Gunapati Reddy's total remuneration
• The total compensation is 157% higher than the average for the industry
• TAJGVK Hotels & Resorts' EPS grew by 70% over the past three years while total shareholder return over the past three years was 134%

CEO Gunapati Reddy has done a decent job of delivering relatively good performance at TAJGVK Hotels & Resorts Limited (NSE:TAJGVK) 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 17th of August. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for TAJGVK Hotels & Resorts

How Does Total Compensation For Gunapati Reddy Compare With Other Companies In The Industry?

At the time of writing, our data shows that TAJGVK Hotels & Resorts Limited has a market capitalization of ₹19b, and reported total annual CEO compensation of ₹59m for the year to March 2024. That's a modest increase of 6.3% on the prior year. We note that the salary portion, which stands at ₹40.2m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Indian Hospitality industry with market capitalizations ranging between ₹8.4b and ₹34b had a median total CEO compensation of ₹23m. Accordingly, our analysis reveals that TAJGVK Hotels & Resorts Limited pays Gunapati Reddy north of the industry median. What's more, Gunapati Reddy holds ₹3.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹40m	₹38m	69%
Other	₹18m	₹17m	31%
Total Compensation	₹59m	₹55m	100%

Speaking on an industry level, nearly 91% of total compensation represents salary, while the remainder of 9% is other remuneration. In TAJGVK Hotels & Resorts' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at TAJGVK Hotels & Resorts Limited's Growth Numbers

TAJGVK Hotels & Resorts Limited's earnings per share (EPS) grew 70% per year over the last three years. It saw its revenue drop 1.4% 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 TAJGVK Hotels & Resorts Limited Been A Good Investment?

Most shareholders would probably be pleased with TAJGVK Hotels & Resorts Limited for providing a total return of 134% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for TAJGVK Hotels & Resorts that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.