How Should Investors Feel About Vidhi Specialty Food Ingredients' (NSE:VIDHIING) CEO Remuneration?

Bipin Manek became the CEO of Vidhi Specialty Food Ingredients Limited (NSE:VIDHIING) in 2007, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Vidhi Specialty Food Ingredients pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Vidhi Specialty Food Ingredients

Comparing Vidhi Specialty Food Ingredients Limited's CEO Compensation With the industry

At the time of writing, our data shows that Vidhi Specialty Food Ingredients Limited has a market capitalization of ₹6.2b, and reported total annual CEO compensation of ₹20m for the year to March 2020. We note that's an increase of 15% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹5.3m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹6.6m. This suggests that Bipin Manek is paid more than the median for the industry. Furthermore, Bipin Manek directly owns ₹1.7b worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. Vidhi Specialty Food Ingredients sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Vidhi Specialty Food Ingredients Limited's Growth Numbers

Vidhi Specialty Food Ingredients Limited has seen its earnings per share (EPS) increase by 28% a year over the past three years. It saw its revenue drop 6.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Vidhi Specialty Food Ingredients Limited Been A Good Investment?

With a total shareholder return of 16% over three years, Vidhi Specialty Food Ingredients Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

As we noted earlier, Vidhi Specialty Food Ingredients pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong over three years. Looking at the same time period, we think that the shareholder returns are respectable. While it may be worth researching further, we don't see a problem with the high CEO pay, given the good EPS growth.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for Vidhi Specialty Food Ingredients that investors should look into moving forward.

Important note: Vidhi Specialty Food Ingredients 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.

If you’re looking to trade Vidhi Specialty Food Ingredients, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.