LT Foods Limited's (NSE:DAAWAT) CEO Looks Due For A Compensation Raise

Key Insights

• LT Foods' Annual General Meeting to take place on 29th of September
• Salary of ₹16.1m is part of CEO Ashwani Arora's total remuneration
• Total compensation is 36% below industry average
• LT Foods' total shareholder return over the past three years was 227% while its EPS grew by 23% over the past three years

The solid performance at LT Foods Limited (NSE:DAAWAT) has been impressive and shareholders will probably be pleased to know that CEO Ashwani Arora has delivered. At the upcoming AGM on 29th of September, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

Check out our latest analysis for LT Foods

How Does Total Compensation For Ashwani Arora Compare With Other Companies In The Industry?

Our data indicates that LT Foods Limited has a market capitalization of ₹55b, and total annual CEO compensation was reported as ₹21m for the year to March 2023. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is ₹16.1m, represents most of the total compensation being paid.

On examining similar-sized companies in the Indian Food industry with market capitalizations between ₹33b and ₹133b, we discovered that the median CEO total compensation of that group was ₹33m. This suggests that Ashwani Arora is paid below the industry median. Furthermore, Ashwani Arora directly owns ₹3.6b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	₹16m	₹16m	76%
Other	₹5.0m	₹5.0m	24%
Total Compensation	₹21m	₹21m	100%

Talking in terms of the industry, salary represented approximately 95% of total compensation out of all the companies we analyzed, while other remuneration made up 5% of the pie. In LT Foods' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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.

LT Foods Limited's Growth

LT Foods Limited has seen its earnings per share (EPS) increase by 23% a year over the past three years. It achieved revenue growth of 22% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has LT Foods Limited Been A Good Investment?

Most shareholders would probably be pleased with LT Foods Limited for providing a total return of 227% 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.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in 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.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for LT Foods that investors should look into moving forward.

Switching gears from LT Foods, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.