Why We Think The CEO Of Hubtown Limited (NSE:HUBTOWN) May Soon See A Pay Rise

Key Insights

• Hubtown's Annual General Meeting to take place on 30th of September
• Total pay for CEO Vimal Shah includes ₹6.48m salary
• Total compensation is 46% below industry average
• Over the past three years, Hubtown's EPS grew by 44% and over the past three years, the total shareholder return was 882%

Shareholders will be pleased by the impressive results for Hubtown Limited (NSE:HUBTOWN) recently and CEO Vimal Shah has played a key role. At the upcoming AGM on 30th of September, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

View our latest analysis for Hubtown

How Does Total Compensation For Vimal Shah Compare With Other Companies In The Industry?

Our data indicates that Hubtown Limited has a market capitalization of ₹28b, and total annual CEO compensation was reported as ₹7.7m for the year to March 2024. That's a notable increase of 11% on last year. Notably, the salary which is ₹6.48m, represents most of the total compensation being paid.

In comparison with other companies in the Indian Real Estate industry with market capitalizations ranging from ₹17b to ₹67b, the reported median CEO total compensation was ₹14m. In other words, Hubtown pays its CEO lower than the industry median. Moreover, Vimal Shah also holds ₹5.6b worth of Hubtown 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	₹6.5m	₹6.2m	84%
Other	₹1.3m	₹731k	16%
Total Compensation	₹7.7m	₹7.0m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. Hubtown pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Hubtown Limited's Growth

Over the past three years, Hubtown Limited has seen its earnings per share (EPS) grow by 44% per year. Its revenue is up 1.4% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Hubtown Limited Been A Good Investment?

We think that the total shareholder return of 882%, over three years, would leave most Hubtown Limited shareholders smiling. 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...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Hubtown that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.