Oswal Greentech Limited's (NSE:OSWALGREEN) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Oswal Greentech will host its Annual General Meeting on 21st of September
• Total pay for CEO Anil Bhalla includes ₹19.4m salary
• Total compensation is 1,546% above industry average
• Over the past three years, Oswal Greentech's EPS fell by 22% and over the past three years, the total shareholder return was 87%

Oswal Greentech Limited (NSE:OSWALGREEN) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. The upcoming AGM on 21st of September may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

See our latest analysis for Oswal Greentech

How Does Total Compensation For Anil Bhalla Compare With Other Companies In The Industry?

At the time of writing, our data shows that Oswal Greentech Limited has a market capitalization of ₹6.3b, and reported total annual CEO compensation of ₹30m for the year to March 2023. We note that's an increase of 38% above last year. We note that the salary portion, which stands at ₹19.4m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Indian Real Estate industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹1.8m. This suggests that Anil Bhalla is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	₹19m	₹14m	65%
Other	₹10m	₹7.5m	35%
Total Compensation	₹30m	₹21m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. In Oswal Greentech's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Oswal Greentech Limited's Growth Numbers

Over the last three years, Oswal Greentech Limited has shrunk its earnings per share by 22% per year. It saw its revenue drop 10% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Oswal Greentech Limited Been A Good Investment?

We think that the total shareholder return of 87%, over three years, would leave most Oswal Greentech Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Oswal Greentech you should be aware of, and 2 of them shouldn't be ignored.

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.