This Is Why ITC Limited's (NSE:ITC) CEO Compensation Looks Appropriate

Key Insights

• ITC's Annual General Meeting to take place on 25th of July
• Total pay for CEO Sanjiv Puri includes ₹35.4m salary
• Total compensation is similar to the industry average
• ITC's total shareholder return over the past three years was 62% while its EPS grew by 8.4% over the past three years

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Performance at ITC Limited (NSE:ITC) has been reasonably good and CEO Sanjiv Puri has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 25th of July, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for ITC

How Does Total Compensation For Sanjiv Puri Compare With Other Companies In The Industry?

According to our data, ITC Limited has a market capitalization of ₹5.3t, and paid its CEO total annual compensation worth ₹257m over the year to March 2025. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹35m.

On comparing similar companies in the India Tobacco industry with market capitalizations above ₹689b, we found that the median total CEO compensation was ₹351m. From this we gather that Sanjiv Puri is paid around the median for CEOs in the industry. Furthermore, Sanjiv Puri directly owns ₹191m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 30% of total compensation out of all the companies we analyzed, while other remuneration made up 70% of the pie. ITC sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at ITC Limited's Growth Numbers

Over the past three years, ITC Limited has seen its earnings per share (EPS) grow by 8.4% per year. It achieved revenue growth of 11% over the last year.

We think the revenue growth is good. And the improvement in EPSis modest but respectable. Although we'll stop short of calling the stock a top performer, we think the company has potential. 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 ITC Limited Been A Good Investment?

We think that the total shareholder return of 62%, over three years, would leave most ITC Limited shareholders smiling. 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...

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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for ITC that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.