Here's Why Shareholders Will Not Be Complaining About TGB Banquets and Hotels Limited's (NSE:TGBHOTELS) CEO Pay Packet

The performance at TGB Banquets and Hotels Limited (NSE:TGBHOTELS) has been quite strong recently and CEO Narendra Somani has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 30 September 2022. 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. Here is our take on why we think CEO compensation is not extravagant.

View our latest analysis for TGB Banquets and Hotels

Comparing TGB Banquets and Hotels Limited's CEO Compensation With The Industry

According to our data, TGB Banquets and Hotels Limited has a market capitalization of ₹357m, and paid its CEO total annual compensation worth ₹4.8m over the year to March 2022. There was no change in the compensation compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹4.8m.

For comparison, other companies in the industry with market capitalizations below ₹16b, reported a median total CEO compensation of ₹4.0m. From this we gather that Narendra Somani is paid around the median for CEOs in the industry. Furthermore, Narendra Somani directly owns ₹80m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	₹4.8m	₹4.8m	100%
Other	-	-	-
Total Compensation	₹4.8m	₹4.8m	100%

On an industry level, around 99% of total compensation represents salary and 1% is other remuneration. On a company level, TGB Banquets and Hotels prefers to reward its CEO through a salary, opting not to pay Narendra Somani through non-salary benefits. 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.

TGB Banquets and Hotels Limited's Growth

TGB Banquets and Hotels Limited has seen its earnings per share (EPS) increase by 47% a year over the past three years. Its revenue is up 92% over the last year.

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. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has TGB Banquets and Hotels Limited Been A Good Investment?

We think that the total shareholder return of 209%, over three years, would leave most TGB Banquets and Hotels Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

TGB Banquets and Hotels rewards its CEO solely through a salary, ignoring non-salary benefits completely. Some shareholders will probably be more lenient on CEO compensation in the upcoming AGM given the pleasing performance of the company recently. In saying that, some shareholders may feel that the more important issues to be addressed may be how the management plans to steer the company towards sustainable profitability in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 2 which are a bit unpleasant) in TGB Banquets and Hotels we think you should know about.

Switching gears from TGB Banquets and 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.

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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.