We Take A Look At Why TGB Banquets and Hotels Limited's (NSE:TGBHOTELS) CEO Has Earned Their Pay Packet

Key Insights

• TGB Banquets and Hotels will host its Annual General Meeting on 23rd of September
• Total pay for CEO Narendra Somani includes ₹4.80m salary
• Total compensation is similar to the industry average
• Over the past three years, TGB Banquets and Hotels' EPS grew by 81% and over the past three years, the total shareholder return was 68%

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. Shareholders will have this at the front of their minds in the upcoming AGM on 23rd of September. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

See our latest analysis for TGB Banquets and Hotels

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

Our data indicates that TGB Banquets and Hotels Limited has a market capitalization of ₹441m, and total annual CEO compensation was reported as ₹4.8m for the year to March 2024. This was the same as last year. Notably, the salary of ₹4.8m 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 ₹5.4m. This suggests that TGB Banquets and Hotels remunerates its CEO largely in line with the industry average. Furthermore, Narendra Somani directly owns ₹101m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹4.8m	₹4.8m	100%
Other	-	-	-
Total Compensation	₹4.8m	₹4.8m	100%

Talking in terms of the industry, salary represented approximately 94% of total compensation out of all the companies we analyzed, while other remuneration made up 6% of the pie. 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 total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at TGB Banquets and Hotels Limited's Growth Numbers

Over the past three years, TGB Banquets and Hotels Limited has seen its earnings per share (EPS) grow by 81% per year. It achieved revenue growth of 6.1% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 TGB Banquets and Hotels Limited Been A Good Investment?

Boasting a total shareholder return of 68% over three years, TGB Banquets and 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...

TGB Banquets and Hotels pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for TGB Banquets and Hotels (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

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.