This Is Why Sunteck Realty Limited's (NSE:SUNTECK) CEO Compensation Looks Appropriate

Key Insights

• Sunteck Realty to hold its Annual General Meeting on 27th of September
• Salary of ₹11.3m is part of CEO Kamal Khetan's total remuneration
• The overall pay is 57% below the industry average
• Over the past three years, Sunteck Realty's EPS fell by 56% and over the past three years, the total shareholder return was 69%

Shareholders may be wondering what CEO Kamal Khetan plans to do to improve the less than great performance at Sunteck Realty Limited (NSE:SUNTECK) recently. At the next AGM coming up on 27th of September, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.

Check out our latest analysis for Sunteck Realty

Comparing Sunteck Realty Limited's CEO Compensation With The Industry

According to our data, Sunteck Realty Limited has a market capitalization of ₹61b, and paid its CEO total annual compensation worth ₹11m over the year to March 2023. Notably, that's a decrease of 55% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹11m.

On comparing similar companies from the Indian Real Estate industry with market caps ranging from ₹33b to ₹133b, we found that the median CEO total compensation was ₹26m. Accordingly, Sunteck Realty pays its CEO under the industry median.

Component	2023	2022	Proportion (2023)
Salary	₹11m	₹25m	100%
Other	-	-	-
Total Compensation	₹11m	₹25m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. On a company level, Sunteck Realty prefers to reward its CEO through a salary, opting not to pay Kamal Khetan through non-salary benefits. 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 Sunteck Realty Limited's Growth Numbers

Over the last three years, Sunteck Realty Limited has shrunk its earnings per share by 56% per year. Its revenue is down 49% over the previous 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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Sunteck Realty Limited Been A Good Investment?

Boasting a total shareholder return of 69% over three years, Sunteck Realty Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Sunteck Realty pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean these strong returns may not continue. These concerns could be addressed to the board and shareholders should revisit their investment thesis to see if it still makes sense.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Sunteck Realty that investors should be aware of in a dynamic business environment.

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.