We Think Shareholders Will Probably Be Generous With Navneet Education Limited's (NSE:NAVNETEDUL) CEO Compensation

Key Insights

• Navneet Education will host its Annual General Meeting on 20th of August
• Total pay for CEO Sunil Gala includes ₹15.9m salary
• Total compensation is similar to the industry average
• Over the past three years, Navneet Education's EPS grew by 153% and over the past three years, the total shareholder return was 67%

We have been pretty impressed with the performance at Navneet Education Limited (NSE:NAVNETEDUL) recently and CEO Sunil Gala deserves a mention for their role in it. Coming up to the next AGM on 20th of August, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

Check out our latest analysis for Navneet Education

Comparing Navneet Education Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Navneet Education Limited has a market capitalization of ₹36b, and reported total annual CEO compensation of ₹19m for the year to March 2024. Notably, that's an increase of 16% over the year before. In particular, the salary of ₹15.9m, makes up a huge portion of the total compensation being paid to the CEO.

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. From this we gather that Sunil Gala is paid around the median for CEOs in the industry. Furthermore, Sunil Gala directly owns ₹1.9b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹16m	₹13m	85%
Other	₹2.7m	₹3.3m	15%
Total Compensation	₹19m	₹16m	100%

On an industry level, roughly 90% of total compensation represents salary and 10% is other remuneration. Our data reveals that Navneet Education allocates salary more or less in line with the wider market. 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.

Navneet Education Limited's Growth

Navneet Education Limited has seen its earnings per share (EPS) increase by 153% a year over the past three years. In the last year, its revenue is down 1.8%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Navneet Education Limited Been A Good Investment?

We think that the total shareholder return of 67%, over three years, would leave most Navneet Education Limited shareholders smiling. 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.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

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 1 which is a bit concerning) in Navneet Education we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.