We Think Some Shareholders May Hesitate To Increase Oswal Greentech Limited's (NSE:OSWALGREEN) CEO Compensation

Key Insights

• Oswal Greentech will host its Annual General Meeting on 8th of August
• Salary of ₹27.0m is part of CEO Anil Bhalla's total remuneration
• The total compensation is 1,679% higher than the average for the industry
• Oswal Greentech's total shareholder return over the past three years was 51% while its EPS was down 64% over the past three years

The share price of Oswal Greentech Limited (NSE:OSWALGREEN) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. Some of these issues will occupy shareholders' minds as the AGM rolls around on 8th of August. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for Oswal Greentech

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

According to our data, Oswal Greentech Limited has a market capitalization of ₹11b, and paid its CEO total annual compensation worth ₹32m over the year to March 2024. Notably, that's an increase of 8.6% over the year before. In particular, the salary of ₹27.0m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Indian Real Estate industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹1.8m. Accordingly, our analysis reveals that Oswal Greentech Limited pays Anil Bhalla north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	₹27m	₹19m	84%
Other	₹5.2m	₹10m	16%
Total Compensation	₹32m	₹30m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. It's interesting to note that Oswal Greentech allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Oswal Greentech Limited's Growth Numbers

Oswal Greentech Limited has reduced its earnings per share by 64% a year over the last three years. In the last year, its revenue is down 18%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-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 Oswal Greentech Limited Been A Good Investment?

Most shareholders would probably be pleased with Oswal Greentech Limited for providing a total return of 51% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

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 Oswal Greentech (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the 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.

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