Increases to CEO Compensation Might Be Put On Hold For Now at United Spirits Limited (NSE:UNITDSPR)

Key Insights

• United Spirits' Annual General Meeting to take place on 31st of July
• CEO Hina Nagarajan's total compensation includes salary of ₹91.5m
• The overall pay is 245% above the industry average
• United Spirits' EPS grew by 28% over the past three years while total shareholder return over the past three years was 119%

Performance at United Spirits Limited (NSE:UNITDSPR) has been reasonably good and CEO Hina Nagarajan has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 31st 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 be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for United Spirits

Comparing United Spirits Limited's CEO Compensation With The Industry

According to our data, United Spirits Limited has a market capitalization of ₹982b, and paid its CEO total annual compensation worth ₹139m over the year to March 2024. That's a notable increase of 17% on last year. In particular, the salary of ₹91.5m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies in the Indian Beverage industry with market capitalizations above ₹670b, we found that the median total CEO compensation was ₹40m. This suggests that Hina Nagarajan is paid more than the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	₹91m	₹99m	66%
Other	₹47m	₹20m	34%
Total Compensation	₹139m	₹119m	100%

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. In United Spirits' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

United Spirits Limited's Growth

United Spirits Limited has seen its earnings per share (EPS) increase by 28% a year over the past three years. It achieved revenue growth of 5.1% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 United Spirits Limited Been A Good Investment?

Most shareholders would probably be pleased with United Spirits Limited for providing a total return of 119% 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.

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. 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for United Spirits that investors should think about before committing capital to this stock.

Switching gears from United Spirits, 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.

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