We Discuss Whether D. P. Abhushan Limited's (NSE:DPABHUSHAN) CEO Is Due For A Pay Rise

Key Insights

• D. P. Abhushan to hold its Annual General Meeting on 27th of September
• Total pay for CEO Santosh Kataria includes ₹6.00m salary
• The overall pay is 68% below the industry average
• D. P. Abhushan's EPS grew by 35% over the past three years while total shareholder return over the past three years was 719%

Shareholders will be pleased by the impressive results for D. P. Abhushan Limited (NSE:DPABHUSHAN) recently and CEO Santosh Kataria has played a key role. At the upcoming AGM on 27th of September, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

Check out our latest analysis for D. P. Abhushan

How Does Total Compensation For Santosh Kataria Compare With Other Companies In The Industry?

According to our data, D. P. Abhushan Limited has a market capitalization of ₹39b, and paid its CEO total annual compensation worth ₹6.0m over the year to March 2024. That's a notable increase of 67% on last year. Notably, the salary of ₹6.0m is the entirety of the CEO compensation.

On comparing similar companies from the Indian Specialty Retail industry with market caps ranging from ₹17b to ₹67b, we found that the median CEO total compensation was ₹18m. Accordingly, D. P. Abhushan pays its CEO under the industry median. Moreover, Santosh Kataria also holds ₹2.1b worth of D. P. Abhushan 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	₹6.0m	₹3.6m	100%
Other	-	-	-
Total Compensation	₹6.0m	₹3.6m	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. Speaking on a company level, D. P. Abhushan prefers to tread along a traditional path, disbursing all compensation through a salary. 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.

D. P. Abhushan Limited's Growth

D. P. Abhushan Limited's earnings per share (EPS) grew 35% per year over the last three years. It achieved revenue growth of 18% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has D. P. Abhushan Limited Been A Good Investment?

Boasting a total shareholder return of 719% over three years, D. P. Abhushan Limited has done well by shareholders. 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...

D. P. Abhushan rewards its CEO solely through a salary, ignoring non-salary benefits completely. Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for D. P. Abhushan you should be aware of, and 1 of them is a bit unpleasant.

Important note: D. P. Abhushan is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.