It Looks Like Shareholders Would Probably Approve Vishnu Chemicals Limited's (NSE:VISHNU) CEO Compensation Package

We have been pretty impressed with the performance at Vishnu Chemicals Limited (NSE:VISHNU) recently and CEO Cherukuri Murthy deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 12 July 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.

View our latest analysis for Vishnu Chemicals

Comparing Vishnu Chemicals Limited's CEO Compensation With the industry

Our data indicates that Vishnu Chemicals Limited has a market capitalization of ₹7.3b, and total annual CEO compensation was reported as ₹6.6m for the year to March 2021. There was no change in the compensation compared to last year. Notably, the salary of ₹6.6m is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹5.3m. From this we gather that Cherukuri Murthy is paid around the median for CEOs in the industry. What's more, Cherukuri Murthy holds ₹3.8b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	₹6.6m	₹6.6m	100%
Other	-	-	-
Total Compensation	₹6.6m	₹6.6m	100%

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. Speaking on a company level, Vishnu Chemicals prefers to tread along a traditional path, disbursing all compensation through a salary. 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 Vishnu Chemicals Limited's Growth Numbers

Vishnu Chemicals Limited's earnings per share (EPS) grew 34% per year over the last three years. In the last year, its revenue changed by just 0.8%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Vishnu Chemicals Limited Been A Good Investment?

Most shareholders would probably be pleased with Vishnu Chemicals Limited for providing a total return of 129% over three years. 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.

In Summary...

Vishnu Chemicals rewards its CEO solely through a salary, ignoring non-salary benefits completely. Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Vishnu Chemicals (1 can't be ignored!) that you should be aware of before investing here.

Switching gears from Vishnu Chemicals, 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.

When trading Vishnu Chemicals or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on 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 (at) simplywallst.com.