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

Key Insights

• Vardhman Special Steels' Annual General Meeting to take place on 27th of September
• CEO Sachit Jain's total compensation includes salary of ₹13.8m
• Total compensation is 663% above industry average
• Vardhman Special Steels' total shareholder return over the past three years was 444% while its EPS grew by 50% over the past three years

Performance at Vardhman Special Steels Limited (NSE:VSSL) has been reasonably good and CEO Sachit Jain has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 27th of September. However, some shareholders may still want to keep CEO compensation within reason.

View 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 ₹17b, and reported total annual CEO compensation of ₹91m for the year to March 2023. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹14m.

On examining similar-sized companies in the Indian Metals and Mining industry with market capitalizations between ₹8.3b and ₹33b, we discovered that the median CEO total compensation of that group was ₹12m. Hence, we can conclude that Sachit Jain is remunerated higher than the industry median. What's more, Sachit Jain holds ₹2.3b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	₹14m	₹14m	15%
Other	₹77m	₹79m	85%
Total Compensation	₹91m	₹93m	100%

Talking in terms of the industry, salary represented approximately 100% of total compensation out of all the companies we analyzed, while other remuneration made up 0.0956% of the pie. It's interesting to note that Vardhman Special Steels allocates a smaller portion of compensation to salary 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.

A Look at Vardhman Special Steels Limited's Growth Numbers

Vardhman Special Steels Limited has seen its earnings per share (EPS) increase by 50% a year over the past three years. In the last year, its revenue is up 11%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Vardhman Special Steels Limited Been A Good Investment?

Most shareholders would probably be pleased with Vardhman Special Steels Limited for providing a total return of 444% 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...

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, 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 is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Vardhman Special Steels that you should be aware of before investing.

Important note: Vardhman Special Steels 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. 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.