Shareholders May Not Be So Generous With Mukta Arts Limited's (NSE:MUKTAARTS) CEO Compensation And Here's Why

Key Insights

• Mukta Arts will host its Annual General Meeting on 27th of September
• CEO Rahul Puri's total compensation includes salary of ₹6.23m
• The total compensation is 155% higher than the average for the industry
• Mukta Arts' EPS grew by 0.8% over the past three years while total shareholder return over the past three years was 97%

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 will still be cautious of paying the CEO excessively.

Check out our latest analysis for Mukta Arts

How Does Total Compensation For Rahul Puri Compare With Other Companies In The Industry?

At the time of writing, our data shows that Mukta Arts Limited has a market capitalization of ₹1.8b, and reported total annual CEO compensation of ₹6.3m for the year to March 2024. That's just a smallish increase of 7.9% on last year. In particular, the salary of ₹6.23m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Indian Entertainment industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹2.5m. Accordingly, our analysis reveals that Mukta Arts Limited pays Rahul Puri north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	₹6.2m	₹5.8m	99%
Other	₹47k	₹47k	1%
Total Compensation	₹6.3m	₹5.8m	100%

On an industry level, roughly 100% of total compensation represents salary and 0.08863636% is other remuneration. Mukta Arts is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to 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.

A Look at Mukta Arts Limited's Growth Numbers

Over the last three years, Mukta Arts Limited has not seen its earnings per share change much, though there is a slight positive movement. It achieved revenue growth of 23% over the last year.

We think the revenue growth is good. And the modest growth in EPS isn't bad, either. So while performance isn't amazing, we think it really does seem quite respectable. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Mukta Arts Limited Been A Good Investment?

Most shareholders would probably be pleased with Mukta Arts Limited for providing a total return of 97% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Rahul receives almost all of their compensation through a salary. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 2 which can't be ignored) in Mukta Arts we think you should know about.

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.

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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.