We Think Some Shareholders May Hesitate To Increase Emami Realty Limited's (NSE:EMAMIREAL) CEO Compensation

Key Insights

• Emami Realty to hold its Annual General Meeting on 27th of September
• Salary of ₹19.5m is part of CEO Nitesh Gupta's total remuneration
• The total compensation is 928% higher than the average for the industry
• Emami Realty's total shareholder return over the past three years was 40% while its EPS was down 102% over the past three years

Despite strong share price growth of 40% for Emami Realty Limited (NSE:EMAMIREAL) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 27th of September. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

View our latest analysis for Emami Realty

How Does Total Compensation For Nitesh Gupta Compare With Other Companies In The Industry?

According to our data, Emami Realty Limited has a market capitalization of ₹4.1b, and paid its CEO total annual compensation worth ₹19m over the year to March 2024. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹19m.

In comparison with other companies in the Indian Real Estate industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹1.9m. This suggests that Nitesh Gupta is paid more than the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	₹19m	₹20m	100%
Other	-	-	-
Total Compensation	₹19m	₹20m	100%

On an industry level, around 99% of total compensation represents salary and 0.5074122% is other remuneration. At the company level, Emami Realty pays Nitesh Gupta 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.

Emami Realty Limited's Growth

Over the last three years, Emami Realty Limited has shrunk its earnings per share by 102% per year. It saw its revenue drop 19% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Emami Realty Limited Been A Good Investment?

Most shareholders would probably be pleased with Emami Realty Limited for providing a total return of 40% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Emami Realty pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for Emami Realty (of which 2 are a bit concerning!) that you should know about in order to have a holistic understanding of the 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. 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.