We Think Shareholders Are Less Likely To Approve A Large Pay Rise For IVP Limited's (NSE:IVP) CEO For Now

In the past three years, shareholders of IVP Limited (NSE:IVP) have seen a loss on their investment. Per share earnings growth is also lacking, despite revenue growth. Shareholders will have a chance to take their concerns to the board at the next AGM on 28 July 2021 and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

See our latest analysis for IVP

How Does Total Compensation For Mandar Joshi Compare With Other Companies In The Industry?

At the time of writing, our data shows that IVP Limited has a market capitalization of ₹1.5b, and reported total annual CEO compensation of ₹17m for the year to March 2021. That is, the compensation was roughly the same as last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹17m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹5.6m. Accordingly, our analysis reveals that IVP Limited pays Mandar Joshi north of the industry median.

Component	2021	2020	Proportion (2021)
Salary	₹17m	₹16m	100%
Other	-	-	-
Total Compensation	₹17m	₹16m	100%

Talking in terms of the industry, salary represented approximately 88% of total compensation out of all the companies we analyzed, while other remuneration made up 12% of the pie. On a company level, IVP prefers to reward its CEO through a salary, opting not to pay Mandar Joshi through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at IVP Limited's Growth Numbers

IVP Limited has reduced its earnings per share by 24% a year over the last three years. In the last year, its revenue is up 27%.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has IVP Limited Been A Good Investment?

Since shareholders would have lost about 14% over three years, some IVP Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

IVP pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 5 warning signs for IVP (2 shouldn't be ignored!) that you should be aware of before investing here.

Important note: IVP 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.

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This article by Simply Wall St is general in nature. 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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