Arvind Fashions Limited's (NSE:ARVINDFASN) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Arvind Fashions will host its Annual General Meeting on 19th of August
• CEO Shailesh Chaturvedi's total compensation includes salary of ₹84.7m
• The overall pay is 227% above the industry average
• Arvind Fashions' total shareholder return over the past three years was 100% while its EPS grew by 131% over the past three years

Performance at Arvind Fashions Limited (NSE:ARVINDFASN) has been reasonably good and CEO Shailesh Chaturvedi has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 19th of August, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Arvind Fashions

How Does Total Compensation For Shailesh Chaturvedi Compare With Other Companies In The Industry?

According to our data, Arvind Fashions Limited has a market capitalization of ₹63b, and paid its CEO total annual compensation worth ₹98m over the year to March 2024. That's a notable increase of 12% on last year. We note that the salary portion, which stands at ₹84.7m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the Indian Specialty Retail industry with market caps ranging from ₹34b to ₹134b, we found that the median CEO total compensation was ₹30m. This suggests that Shailesh Chaturvedi is paid more than the median for the industry. Furthermore, Shailesh Chaturvedi directly owns ₹146m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹85m	₹61m	87%
Other	₹13m	₹27m	13%
Total Compensation	₹98m	₹88m	100%

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. It's interesting to note that Arvind Fashions allocates a smaller portion of compensation to salary 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.

Arvind Fashions Limited's Growth

Arvind Fashions Limited has seen its earnings per share (EPS) increase by 131% a year over the past three years. Its revenue is down 2.5% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Arvind Fashions Limited Been A Good Investment?

We think that the total shareholder return of 100%, over three years, would leave most Arvind Fashions 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.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

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 2 warning signs for Arvind Fashions you should be aware of, and 1 of them doesn't sit too well with us.

Switching gears from Arvind Fashions, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.