We Think Some Shareholders May Hesitate To Increase Vardhman Special Steels Limited's (NSE:VSSL) CEO Compensation

CEO Sachit Jain has done a decent job of delivering relatively good performance at Vardhman Special Steels Limited (NSE:VSSL) recently. As shareholders go into the upcoming AGM on 30 September 2022, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Vardhman Special Steels

Comparing Vardhman Special Steels Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Vardhman Special Steels Limited has a market capitalization of ₹10b, and reported total annual CEO compensation of ₹93m for the year to March 2022. Notably, that's an increase of 63% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹14m.

For comparison, other companies in the industry with market capitalizations below ₹16b, reported a median total CEO compensation of ₹3.6m. Accordingly, our analysis reveals that Vardhman Special Steels Limited pays Sachit Jain north of the industry median. What's more, Sachit Jain holds ₹1.4b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2022	2021	Proportion (2022)
Salary	₹14m	₹14m	15%
Other	₹79m	₹43m	85%
Total Compensation	₹93m	₹57m	100%

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Vardhman Special Steels 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.

Vardhman Special Steels Limited's Growth

Vardhman Special Steels Limited's earnings per share (EPS) grew 85% per year over the last three years. In the last year, its revenue is up 26%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Vardhman Special Steels Limited Been A Good Investment?

Boasting a total shareholder return of 238% over three years, Vardhman Special Steels 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.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Vardhman Special Steels that investors should look into moving forward.

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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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.