Here's Why Shareholders May Want To Be Cautious With Increasing Saregama India Limited's (NSE:SAREGAMA) CEO Pay Packet

Key Insights

• Saregama India's Annual General Meeting to take place on 27th of August
• Salary of ₹113.8m is part of CEO Vikram Mehra's total remuneration
• The total compensation is 378% higher than the average for the industry
• Over the past three years, Saregama India's EPS grew by 11% and over the past three years, the total shareholder return was 77%

Under the guidance of CEO Vikram Mehra, Saregama India Limited (NSE:SAREGAMA) has performed reasonably well recently. As shareholders go into the upcoming AGM on 27th of August, 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.

See our latest analysis for Saregama India

Comparing Saregama India Limited's CEO Compensation With The Industry

Our data indicates that Saregama India Limited has a market capitalization of ₹102b, and total annual CEO compensation was reported as ₹121m for the year to March 2024. We note that's an increase of 17% above last year. We note that the salary portion, which stands at ₹113.8m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the India Entertainment industry with market caps ranging from ₹84b to ₹268b, we found that the median CEO total compensation was ₹25m. This suggests that Vikram Mehra is paid more than the median for the industry. Moreover, Vikram Mehra also holds ₹1.1b worth of Saregama India stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹114m	₹99m	94%
Other	₹7.0m	₹4.7m	6%
Total Compensation	₹121m	₹103m	100%

Talking in terms of the industry, salary represented approximately 100% of total compensation out of all the companies we analyzed, while other remuneration made up 0.13869626% of the pie. Although there is a difference in how total compensation is set, Saregama India more or less reflects the market in terms of setting the salary. 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.

Saregama India Limited's Growth

Over the past three years, Saregama India Limited has seen its earnings per share (EPS) grow by 11% per year. Its revenue is up 15% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Saregama India Limited Been A Good Investment?

Boasting a total shareholder return of 77% over three years, Saregama India Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

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. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Saregama India that you should be aware of before investing.

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.