It Looks Like Shareholders Would Probably Approve Vimta Labs Limited's (NSE:VIMTALABS) CEO Compensation Package

Key Insights

• Vimta Labs will host its Annual General Meeting on 18th of July
• Salary of ₹13.4m is part of CEO Harita Vasireddi's total remuneration
• Total compensation is similar to the industry average
• Vimta Labs' total shareholder return over the past three years was 74% while its EPS grew by 24% over the past three years

The performance at Vimta Labs Limited (NSE:VIMTALABS) has been quite strong recently and CEO Harita Vasireddi has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 18th of July. 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.

See our latest analysis for Vimta Labs

Comparing Vimta Labs Limited's CEO Compensation With The Industry

According to our data, Vimta Labs Limited has a market capitalization of ₹11b, and paid its CEO total annual compensation worth ₹13m over the year to March 2024. Notably, that's a decrease of 18% over the year before. Notably, the salary of ₹13m is the entirety of the CEO compensation.

For comparison, other companies in the India Life Sciences industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹12m. This suggests that Vimta Labs remunerates its CEO largely in line with the industry average. What's more, Harita Vasireddi holds ₹87m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹13m	₹13m	100%
Other	-	₹3.0m	-
Total Compensation	₹13m	₹16m	100%

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. Speaking on a company level, Vimta Labs prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Vimta Labs Limited's Growth

Over the past three years, Vimta Labs Limited has seen its earnings per share (EPS) grow by 24% per year. Revenue was pretty flat on last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Vimta Labs Limited Been A Good Investment?

Most shareholders would probably be pleased with Vimta Labs Limited for providing a total return of 74% 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.

To Conclude...

Vimta Labs pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Vimta Labs that investors should be aware of in a dynamic business environment.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com