Increases to CEO Compensation Might Be Put On Hold For Now at Paisalo Digital Limited (NSE:PAISALO)

Key Insights

• Paisalo Digital will host its Annual General Meeting on 26th of October
• Salary of ₹40.6m is part of CEO Sunil Agarwal's total remuneration
• The total compensation is 218% higher than the average for the industry
• Paisalo Digital's EPS grew by 25% over the past three years while total shareholder return over the past three years was 96%

Under the guidance of CEO Sunil Agarwal, Paisalo Digital Limited (NSE:PAISALO) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 26th of October. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Paisalo Digital

How Does Total Compensation For Sunil Agarwal Compare With Other Companies In The Industry?

According to our data, Paisalo Digital Limited has a market capitalization of ₹35b, and paid its CEO total annual compensation worth ₹41m over the year to March 2023. That's a slight decrease of 6.8% on the prior year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹41m.

On examining similar-sized companies in the Indian Consumer Finance industry with market capitalizations between ₹17b and ₹67b, we discovered that the median CEO total compensation of that group was ₹13m. Hence, we can conclude that Sunil Agarwal is remunerated higher than the industry median. Moreover, Sunil Agarwal also holds ₹4.1b worth of Paisalo Digital 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	₹41m	₹44m	100%
Other	-	-	-
Total Compensation	₹41m	₹44m	100%

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Speaking on a company level, Paisalo Digital prefers to tread along a traditional path, disbursing all compensation through a salary. 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.

A Look at Paisalo Digital Limited's Growth Numbers

Paisalo Digital Limited's earnings per share (EPS) grew 25% per year over the last three years. Its revenue is up 52% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Paisalo Digital Limited Been A Good Investment?

We think that the total shareholder return of 96%, over three years, would leave most Paisalo Digital Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Paisalo Digital 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, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

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 Paisalo Digital (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

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.