We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Vimta Labs Limited's (NSE:VIMTALABS) CEO For Now

Performance at Vimta Labs Limited (NSE:VIMTALABS) has been reasonably good and CEO Harita Vasireddi has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 05 July 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View 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 ₹5.5b, and paid its CEO total annual compensation worth ₹6.7m over the year to March 2021. We note that's a decrease of 50% compared to last year. Notably, the salary of ₹6.7m is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹3.6m. Accordingly, our analysis reveals that Vimta Labs Limited pays Harita Vasireddi north of the industry median. What's more, Harita Vasireddi holds ₹42m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	₹6.7m	₹13m	100%
Other	-	-	-
Total Compensation	₹6.7m	₹13m	100%

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. At the company level, Vimta Labs pays Harita Vasireddi solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Vimta Labs Limited's Growth

Vimta Labs Limited has seen its earnings per share (EPS) increase by 9.2% a year over the past three years. It achieved revenue growth of 16% over the last year.

This revenue growth could really point to a brighter future. And the modest growth in EPS isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. 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?

Vimta Labs Limited has served shareholders reasonably well, with a total return of 18% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Vimta Labs pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Vimta Labs that investors should think about before committing capital to this stock.

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. 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.
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