Here's Why Shareholders May Want To Be Cautious With Increasing MPS Limited's (NSE:MPSLTD) CEO Pay Packet
Key Insights
- MPS' Annual General Meeting to take place on 8th of August
- Total pay for CEO Rahul Arora includes ₹42.3m salary
- The total compensation is 76% higher than the average for the industry
- Over the past three years, MPS' EPS grew by 30% and over the past three years, the total shareholder return was 234%
Under the guidance of CEO Rahul Arora, MPS Limited (NSE:MPSLTD) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 8th of August. However, some shareholders may still be hesitant of being overly generous with CEO compensation.
Check out our latest analysis for MPS
Comparing MPS Limited's CEO Compensation With The Industry
Our data indicates that MPS Limited has a market capitalization of ₹36b, and total annual CEO compensation was reported as ₹42m for the year to March 2024. That's mostly flat as compared to the prior year's compensation. Notably, the salary of ₹42m is the entirety of the CEO compensation.
On examining similar-sized companies in the Indian Media industry with market capitalizations between ₹17b and ₹67b, we discovered that the median CEO total compensation of that group was ₹24m. Accordingly, our analysis reveals that MPS Limited pays Rahul Arora north of the industry median.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | ₹42m | ₹41m | 100% |
| Other | - | - | - |
| Total Compensation | ₹42m | ₹41m | 100% |
On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. Speaking on a company level, MPS 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.
MPS Limited's Growth
MPS Limited's earnings per share (EPS) grew 30% per year over the last three years. Its revenue is up 8.8% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has MPS Limited Been A Good Investment?
Most shareholders would probably be pleased with MPS Limited for providing a total return of 234% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
MPS rewards its CEO solely through a salary, ignoring non-salary benefits completely. 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, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for MPS that investors should look into moving forward.
Switching gears from MPS, 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.
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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.
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About NSEI:MPSLTD
MPS
Provides platforms and services for content creation, full-service production, and distribution to the publishers, learning companies, corporate institutions, libraries, and content aggregators in India, Europe, the United States, and internationally.
Flawless balance sheet with moderate growth potential.
