Here's Why Shareholders May Want To Be Cautious With Increasing Worth Peripherals Limited's (NSE:WORTH) CEO Pay Packet
Key Insights
- Worth Peripherals' Annual General Meeting to take place on 16th of August
- CEO Raminder Chadha's total compensation includes salary of ā¹5.10m
- The total compensation is 34% higher than the average for the industry
- Worth Peripherals' EPS grew by 2.2% over the past three years while total shareholder return over the past three years was 31%
Under the guidance of CEO Raminder Chadha, Worth Peripherals Limited (NSE:WORTH) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 16th of August. However, some shareholders may still want to keep CEO compensation within reason.
See our latest analysis for Worth Peripherals
How Does Total Compensation For Raminder Chadha Compare With Other Companies In The Industry?
According to our data, Worth Peripherals Limited has a market capitalization of ā¹2.0b, and paid its CEO total annual compensation worth ā¹5.1m over the year to March 2024. This was the same amount the CEO received in the prior year. Notably, the salary of ā¹5.1m is the entirety of the CEO compensation.
On comparing similar-sized companies in the Indian Packaging industry with market capitalizations below ā¹17b, we found that the median total CEO compensation was ā¹3.8m. Hence, we can conclude that Raminder Chadha is remunerated higher than the industry median. What's more, Raminder Chadha holds ā¹879m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2024 | 2023 | Proportion (2024) |
Salary | ā¹5.1m | ā¹5.1m | 100% |
Other | - | - | - |
Total Compensation | ā¹5.1m | ā¹5.1m | 100% |
On an industry level, roughly 82% of total compensation represents salary and 18% is other remuneration. At the company level, Worth Peripherals pays Raminder Chadha solely through a salary, preferring to go down a conventional route. 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 Worth Peripherals Limited's Growth Numbers
Worth Peripherals Limited has seen its earnings per share (EPS) increase by 2.2% a year over the past three years. It saw its revenue drop 10% over the last year.
We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Worth Peripherals Limited Been A Good Investment?
Worth Peripherals Limited has generated a total shareholder return of 31% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
To Conclude...
Worth Peripherals pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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've identified 2 warning signs for Worth Peripherals that investors should be aware of in a dynamic business environment.
Switching gears from Worth Peripherals, 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.
Valuation is complex, but we're here to simplify it.
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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.
About NSEI:WORTH
Flawless balance sheet with acceptable track record.