Here's Why Shareholders May Want To Be Cautious With Increasing TCPL Packaging Limited's (NSE:TCPLPACK) CEO Pay Packet

By
Simply Wall St
Published
August 20, 2021
NSEI:TCPLPACK
Source: Shutterstock

CEO Saket Kanoria has done a decent job of delivering relatively good performance at TCPL Packaging Limited (NSE:TCPLPACK) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 27 August 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for TCPL Packaging

Comparing TCPL Packaging Limited's CEO Compensation With the industry

According to our data, TCPL Packaging Limited has a market capitalization of ₹5.3b, and paid its CEO total annual compensation worth ₹24m over the year to March 2021. We note that's an increase of 34% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹5.4m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹2.6m. Hence, we can conclude that Saket Kanoria is remunerated higher than the industry median. What's more, Saket Kanoria holds ₹139m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary ₹5.4m ₹5.4m 23%
Other ₹18m ₹12m 77%
Total Compensation₹24m ₹18m100%

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. In TCPL Packaging's case, non-salary compensation represents a greater slice of total remuneration, 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.

ceo-compensation
NSEI:TCPLPACK CEO Compensation August 21st 2021

A Look at TCPL Packaging Limited's Growth Numbers

TCPL Packaging Limited has seen its earnings per share (EPS) increase by 20% a year over the past three years. It achieved revenue growth of 13% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has TCPL Packaging Limited Been A Good Investment?

Boasting a total shareholder return of 39% over three years, TCPL Packaging Limited has done well by shareholders. 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.

In Summary...

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. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which shouldn't be ignored) in TCPL Packaging we think you should know about.

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.

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