Increases to CEO Compensation Might Be Put On Hold For Now at Geojit Financial Services Limited (NSE:GEOJITFSL)

Key Insights

• Geojit Financial Services' Annual General Meeting to take place on 25th of July
• CEO Chenayappillil George's total compensation includes salary of ₹12.0m
• The overall pay is 606% above the industry average
• Over the past three years, Geojit Financial Services' EPS fell by 1.4% and over the past three years, the total shareholder return was 75%

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Despite strong share price growth of 75% for Geojit Financial Services Limited (NSE:GEOJITFSL) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 25th of July may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for Geojit Financial Services

How Does Total Compensation For Chenayappillil George Compare With Other Companies In The Industry?

At the time of writing, our data shows that Geojit Financial Services Limited has a market capitalization of ₹21b, and reported total annual CEO compensation of ₹44m for the year to March 2025. We note that's an increase of 28% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹12m.

On examining similar-sized companies in the Indian Capital Markets industry with market capitalizations between ₹8.6b and ₹34b, we discovered that the median CEO total compensation of that group was ₹6.3m. Hence, we can conclude that Chenayappillil George is remunerated higher than the industry median. Furthermore, Chenayappillil George directly owns ₹3.8b worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. Geojit Financial Services pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Geojit Financial Services Limited's Growth

Over the last three years, Geojit Financial Services Limited has shrunk its earnings per share by 1.4% per year. In the last year, its revenue is up 5.7%.

A lack of EPS improvement is not good to see. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Geojit Financial Services Limited Been A Good Investment?

Most shareholders would probably be pleased with Geojit Financial Services Limited for providing a total return of 75% over three years. 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.

To Conclude...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Geojit Financial Services 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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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.