Why We Think The CEO Of LT Foods Limited (NSE:LTFOODS) May Soon See A Pay Rise

Key Insights

• LT Foods' Annual General Meeting to take place on 26th of September
• Salary of ₹12.0m is part of CEO Ashwani Arora's total remuneration
• The overall pay is 57% below the industry average
• LT Foods' total shareholder return over the past three years was 502% while its EPS grew by 28% over the past three years

The impressive results at LT Foods Limited (NSE:LTFOODS) recently will be great news for shareholders. At the upcoming AGM on 26th of September, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

View 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 ₹148b, and total annual CEO compensation was reported as ₹23m for the year to March 2024. Notably, that's an increase of 8.8% over the year before. In particular, the salary of ₹12.0m, makes up a fairly large portion of the total compensation being paid to the CEO.

In comparison with other companies in the Indian Food industry with market capitalizations ranging from ₹84b to ₹268b, the reported median CEO total compensation was ₹54m. In other words, LT Foods pays its CEO lower than the industry median. Moreover, Ashwani Arora also holds ₹9.8b worth of LT Foods stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹12m	₹16m	52%
Other	₹11m	₹5.0m	48%
Total Compensation	₹23m	₹21m	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. LT Foods pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at LT Foods Limited's Growth Numbers

LT Foods Limited has seen its earnings per share (EPS) increase by 28% a year over the past three years. It achieved revenue growth of 14% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 LT Foods Limited Been A Good Investment?

Most shareholders would probably be pleased with LT Foods Limited for providing a total return of 502% 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. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for LT Foods that investors should be aware of in a dynamic business environment.

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.