It's Unlikely That Mukta Arts Limited's (NSE:MUKTAARTS) CEO Will See A Huge Pay Rise This Year

Key Insights

• Mukta Arts' Annual General Meeting to take place on 27th of September
• Total pay for CEO Rahul Puri includes ₹5.77m salary
• The overall pay is 452% above the industry average
• Mukta Arts' EPS grew by 22% over the past three years while total shareholder return over the past three years was 152%

CEO Rahul Puri has done a decent job of delivering relatively good performance at Mukta Arts Limited (NSE:MUKTAARTS) recently. As shareholders go into the upcoming AGM on 27th of September, 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 be hesitant of being overly generous with CEO compensation.

See our latest analysis for Mukta Arts

Comparing Mukta Arts Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Mukta Arts Limited has a market capitalization of ₹1.4b, and reported total annual CEO compensation of ₹5.8m for the year to March 2023. Notably, that's an increase of 46% over the year before. We note that the salary portion, which stands at ₹5.77m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the India Entertainment industry with market capitalizations below ₹17b, we found that the median total CEO compensation was ₹1.1m. Hence, we can conclude that Rahul Puri is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	₹5.8m	₹3.9m	99%
Other	₹47k	₹47k	1%
Total Compensation	₹5.8m	₹4.0m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. Mukta Arts has gone down a largely traditional route, paying Rahul Puri a high salary, giving it preference over non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Mukta Arts Limited's Growth

Mukta Arts Limited's earnings per share (EPS) grew 22% per year over the last three years. In the last year, its revenue is down 3.6%.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Mukta Arts Limited Been A Good Investment?

We think that the total shareholder return of 152%, over three years, would leave most Mukta Arts Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Mukta Arts pays its CEO a majority of compensation through a salary. Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay 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 pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 2 which are a bit concerning) in Mukta Arts we think you should know about.

Important note: Mukta Arts 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.