Shareholders Will Probably Hold Off On Increasing Welspun Corp Limited's (NSE:WELCORP) CEO Compensation For The Time Being

Simply Wall St
August 24, 2021
Source: Shutterstock

The underwhelming share price performance of Welspun Corp Limited (NSE:WELCORP) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 31 August 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Welspun

How Does Total Compensation For Vipul Mathur Compare With Other Companies In The Industry?

Our data indicates that Welspun Corp Limited has a market capitalization of ₹30b, and total annual CEO compensation was reported as ₹55m for the year to March 2021. This was the same amount the CEO received in the prior year. Notably, the salary of ₹55m is the entirety of the CEO compensation.

On comparing similar companies from the same industry with market caps ranging from ₹15b to ₹59b, we found that the median CEO total compensation was ₹27m. Hence, we can conclude that Vipul Mathur is remunerated higher than the industry median.

Component20212020Proportion (2021)
Salary ₹55m ₹55m 100%
Other - - -
Total Compensation₹55m ₹55m100%

On an industry level, around 100% of total compensation represents salary and 0.304% is other remuneration. On a company level, Welspun prefers to reward its CEO through a salary, opting not to pay Vipul Mathur through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

NSEI:WELCORP CEO Compensation August 25th 2021

A Look at Welspun Corp Limited's Growth Numbers

Over the past three years, Welspun Corp Limited has seen its earnings per share (EPS) grow by 65% per year. In the last year, its revenue is down 45%.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Welspun Corp Limited Been A Good Investment?

With a three year total loss of 24% for the shareholders, Welspun Corp Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Welspun pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

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 2 warning signs for Welspun that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

If you’re looking to trade Welspun, 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

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.