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

Key Insights

• Cupid will host its Annual General Meeting on 25th of September
• CEO Omprakash Garg's total compensation includes salary of ₹8.25m
• Total compensation is 410% above industry average
• Cupid's EPS declined by 8.2% over the past three years while total shareholder return over the past three years was 94%

Under the guidance of CEO Omprakash Garg, Cupid Limited (NSE:CUPID) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 25th of September. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Cupid

How Does Total Compensation For Omprakash Garg Compare With Other Companies In The Industry?

According to our data, Cupid Limited has a market capitalization of ₹5.4b, and paid its CEO total annual compensation worth ₹19m over the year to March 2023. That's a notable increase of 34% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹8.3m.

For comparison, other companies in the Indian Personal Products industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹3.8m. Hence, we can conclude that Omprakash Garg is remunerated higher than the industry median. Furthermore, Omprakash Garg directly owns ₹11m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	₹8.3m	₹7.6m	43%
Other	₹11m	₹6.7m	57%
Total Compensation	₹19m	₹14m	100%

On an industry level, roughly 97% of total compensation represents salary and 3% is other remuneration. It's interesting to note that Cupid allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Cupid Limited's Growth Numbers

Over the last three years, Cupid Limited has shrunk its earnings per share by 8.2% per year. It achieved revenue growth of 24% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Cupid Limited Been A Good Investment?

Boasting a total shareholder return of 94% over three years, Cupid 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...

The overall company performance has been commendable, however there are still areas for improvement. We still think that some shareholders will be hesitant of increasing CEO pay until EPS growth improves, since they are already paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 3 warning signs for Cupid that investors should look into moving forward.

Switching gears from Cupid, 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.