It's Unlikely That Nestlé India Limited's (NSE:NESTLEIND) CEO Will See A Huge Pay Rise This Year

Key Insights

• Nestlé India to hold its Annual General Meeting on 5th of July
• Salary of ₹183.9m is part of CEO Suresh Narayanan's total remuneration
• Total compensation is 260% above industry average
• Nestlé India's total shareholder return over the past three years was 50% while its EPS grew by 14% over the past three years

Under the guidance of CEO Suresh Narayanan, Nestlé India Limited (NSE:NESTLEIND) has performed reasonably well recently. As shareholders go into the upcoming AGM on 5th of July, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Nestlé India

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

Our data indicates that Nestlé India Limited has a market capitalization of ₹2.5t, and total annual CEO compensation was reported as ₹294m for the year to March 2024. We note that's an increase of 66% above last year. In particular, the salary of ₹183.9m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Indian Food industry with market capitalizations over ₹667b, the reported median total CEO compensation was ₹82m. This suggests that Suresh Narayanan is paid more than the median for the industry.

Component	2024	2022	Proportion (2024)
Salary	₹184m	₹96m	63%
Other	₹110m	₹81m	37%
Total Compensation	₹294m	₹177m	100%

Speaking on an industry level, nearly 98% of total compensation represents salary, while the remainder of 2% is other remuneration. Nestlé India pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Nestlé India Limited's Growth

Nestlé India Limited's earnings per share (EPS) grew 14% per year over the last three years. It achieved revenue growth of 10% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, 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 Nestlé India Limited Been A Good Investment?

Boasting a total shareholder return of 50% over three years, Nestlé India Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for Nestlé India you should be aware of, and 1 of them is potentially serious.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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