We Think Some Shareholders May Hesitate To Increase Marico Limited's (NSE:MARICO) CEO Compensation

Key Insights

• Marico will host its Annual General Meeting on 9th of August
• Salary of ₹94.8m is part of CEO Saugata Gupta's total remuneration
• The total compensation is 151% higher than the average for the industry
• Marico's total shareholder return over the past three years was 32% while its EPS grew by 8.0% over the past three years

Performance at Marico Limited (NSE:MARICO) has been reasonably good and CEO Saugata Gupta has done a decent job of steering the company in the right direction. 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 9th of August. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Marico

Comparing Marico Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Marico Limited has a market capitalization of ₹857b, and reported total annual CEO compensation of ₹237m for the year to March 2024. That's a slight decrease of 5.6% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹95m.

On comparing similar companies in the Indian Food industry with market capitalizations above ₹670b, we found that the median total CEO compensation was ₹95m. This suggests that Saugata Gupta is paid more than the median for the industry. Furthermore, Saugata Gupta directly owns ₹625m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹95m	₹87m	40%
Other	₹142m	₹164m	60%
Total Compensation	₹237m	₹251m	100%

On an industry level, roughly 100% of total compensation represents salary and 0.4071893% is other remuneration. Marico sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Marico Limited's Growth

Marico Limited's earnings per share (EPS) grew 8.0% per year over the last three years. Its revenue is down 1.1% over the previous year.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Marico Limited Been A Good Investment?

Marico Limited has served shareholders reasonably well, with a total return of 32% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

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, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

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 Marico that investors should look into moving forward.

Important note: Marico 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.

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.

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