Here's Why Rossell India Limited's (NSE:ROSSELLIND) CEO Compensation Is The Least Of Shareholders' Concerns

Key Insights

• Rossell India to hold its Annual General Meeting on 20th of August
• Salary of ₹10.5m is part of CEO Harsh Gupta's total remuneration
• Total compensation is similar to the industry average
• Rossell India's total shareholder return over the past three years was 265% while its EPS was down 27% over the past three years

Rossell India Limited (NSE:ROSSELLIND) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 20th of August. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

Check out our latest analysis for Rossell India

How Does Total Compensation For Harsh Gupta Compare With Other Companies In The Industry?

At the time of writing, our data shows that Rossell India Limited has a market capitalization of ₹22b, and reported total annual CEO compensation of ₹13m for the year to March 2024. That's a notable decrease of 26% on last year. Notably, the salary which is ₹10.5m, represents most of the total compensation being paid.

On comparing similar companies from the Indian Food industry with market caps ranging from ₹8.4b to ₹34b, we found that the median CEO total compensation was ₹15m. So it looks like Rossell India compensates Harsh Gupta in line with the median for the industry. Furthermore, Harsh Gupta directly owns ₹1.1b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹11m	₹11m	80%
Other	₹2.6m	₹6.9m	20%
Total Compensation	₹13m	₹18m	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. It's interesting to note that Rossell India allocates a smaller portion of compensation to salary 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.

A Look at Rossell India Limited's Growth Numbers

Over the last three years, Rossell India Limited has shrunk its earnings per share by 27% per year. In the last year, its revenue is up 5.1%.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Rossell India Limited Been A Good Investment?

Most shareholders would probably be pleased with Rossell India Limited for providing a total return of 265% over three years. 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.

In Summary...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Rossell India you should be aware of, and 2 of them are concerning.

Switching gears from Rossell India, 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.

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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.