Here's What We Learned About The CEO Pay At Vimta Labs Limited (NSE:VIMTALABS)

Harita Vasireddi became the CEO of Vimta Labs Limited (NSE:VIMTALABS) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Vimta Labs pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Vimta Labs

How Does Total Compensation For Harita Vasireddi Compare With Other Companies In The Industry?

Our data indicates that Vimta Labs Limited has a market capitalization of ₹3.0b, and total annual CEO compensation was reported as ₹13m for the year to March 2020. That's a notable increase of 8.1% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹13m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹5.4m. Hence, we can conclude that Harita Vasireddi is remunerated higher than the industry median. Furthermore, Harita Vasireddi directly owns ₹23m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. On a company level, Vimta Labs prefers to reward its CEO through a salary, opting not to pay Harita Vasireddi through 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 Vimta Labs Limited's Growth Numbers

Vimta Labs Limited saw earnings per share stay pretty flat over the last three years. It saw its revenue drop 1.7% over the last year.

A lack of EPS improvement is not good to see. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Vimta Labs Limited Been A Good Investment?

Vimta Labs Limited has not done too badly by shareholders, with a total return of 4.8%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Vimta Labs pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Harita is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, EPS has not grown in three years, failing to impress us. And while shareholder returns have been respectable, they have hardly been superb. So you can understand why we do not think CEO compensation is particularly modest!

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. We've identified 1 warning sign for Vimta Labs that investors should be aware of in a dynamic business environment.

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