CarTrade Tech Limited's (NSE:CARTRADE) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• CarTrade Tech to hold its Annual General Meeting on 27th of September
• Total pay for CEO Vinay Sanghi includes ₹71.6m salary
• The total compensation is 708% higher than the average for the industry
• CarTrade Tech's EPS declined by 19% over the past three years while total shareholder loss over the past three years was 25%

The underwhelming share price performance of CarTrade Tech Limited (NSE:CARTRADE) in the past three years would have disappointed many shareholders. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. The AGM coming up on 27th of September will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

See our latest analysis for CarTrade Tech

Comparing CarTrade Tech Limited's CEO Compensation With The Industry

Our data indicates that CarTrade Tech Limited has a market capitalization of ₹47b, and total annual CEO compensation was reported as ₹149m for the year to March 2024. We note that's a decrease of 27% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹72m.

In comparison with other companies in the Indian Specialty Retail industry with market capitalizations ranging from ₹17b to ₹67b, the reported median CEO total compensation was ₹18m. Hence, we can conclude that Vinay Sanghi is remunerated higher than the industry median. Moreover, Vinay Sanghi also holds ₹1.3b worth of CarTrade Tech 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	₹72m	₹64m	48%
Other	₹78m	₹141m	52%
Total Compensation	₹149m	₹204m	100%

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. CarTrade Tech sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at CarTrade Tech Limited's Growth Numbers

Over the last three years, CarTrade Tech Limited has shrunk its earnings per share by 19% per year. It achieved revenue growth of 49% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 CarTrade Tech Limited Been A Good Investment?

Since shareholders would have lost about 25% over three years, some CarTrade Tech Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at CarTrade Tech.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.