Shareholders Will Probably Not Have Any Issues With VLS Finance Limited's (NSE:VLSFINANCE) CEO Compensation

Key Insights

• VLS Finance will host its Annual General Meeting on 28th of September
• Salary of ₹5.04m is part of CEO Suresh Agarwal's total remuneration
• Total compensation is similar to the industry average
• VLS Finance's EPS grew by 8.7% over the past three years while total shareholder return over the past three years was 100%

CEO Suresh Agarwal has done a decent job of delivering relatively good performance at VLS Finance Limited (NSE:VLSFINANCE) 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 28th of September. We present our case of why we think CEO compensation looks fair.

View our latest analysis for VLS Finance

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

Our data indicates that VLS Finance Limited has a market capitalization of ₹13b, and total annual CEO compensation was reported as ₹5.0m for the year to March 2024. We note that's an increase of 16% above last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹5.0m.

On comparing similar companies from the Indian Capital Markets industry with market caps ranging from ₹8.3b to ₹33b, we found that the median CEO total compensation was ₹4.8m. So it looks like VLS Finance compensates Suresh Agarwal in line with the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	₹5.0m	₹4.4m	100%
Other	-	-	-
Total Compensation	₹5.0m	₹4.4m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. At the company level, VLS Finance pays Suresh Agarwal solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

VLS Finance Limited's Growth

VLS Finance Limited has seen its earnings per share (EPS) increase by 8.7% a year over the past three years. Its revenue is up 74% over the last year.

It's great to see that revenue growth is strong. And in that context, the modest EPS improvement certainly isn't shabby. We wouldn't say this is necessarily top notch growth, but it is certainly promising. 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 VLS Finance Limited Been A Good Investment?

Most shareholders would probably be pleased with VLS Finance Limited for providing a total return of 100% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

VLS Finance pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for VLS Finance that investors should look into moving forward.

Important note: VLS Finance is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.