This Is Why V-Mart Retail Limited's (NSE:VMART) CEO Compensation Looks Appropriate

Key Insights

• V-Mart Retail will host its Annual General Meeting on 31st of July
• CEO Lalit Agarwal's total compensation includes salary of ₹11.3m
• The overall pay is 48% below the industry average
• Over the past three years, V-Mart Retail's EPS fell by 90% and over the past three years, the total shareholder return was 2.7%

Shareholders may be wondering what CEO Lalit Agarwal plans to do to improve the less than great performance at V-Mart Retail Limited (NSE:VMART) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 31st of July. 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.

View our latest analysis for V-Mart Retail

Comparing V-Mart Retail Limited's CEO Compensation With The Industry

Our data indicates that V-Mart Retail Limited has a market capitalization of ₹69b, and total annual CEO compensation was reported as ₹19m for the year to March 2024. That's a notable decrease of 8.2% on last year. We note that the salary portion, which stands at ₹11.3m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the India Multiline Retail industry with market capitalizations ranging from ₹33b to ₹134b, the reported median CEO total compensation was ₹35m. That is to say, Lalit Agarwal is paid under the industry median. Furthermore, Lalit Agarwal directly owns ₹4.4b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹11m	₹9.8m	61%
Other	₹7.2m	₹10m	39%
Total Compensation	₹19m	₹20m	100%

Speaking on an industry level, nearly 61% of total compensation represents salary, while the remainder of 39% is other remuneration. There isn't a significant difference between V-Mart Retail and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at V-Mart Retail Limited's Growth Numbers

Over the last three years, V-Mart Retail Limited has shrunk its earnings per share by 90% per year. Its revenue is up 13% over the last year.

Few shareholders would be pleased to read that EPS have declined. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has V-Mart Retail Limited Been A Good Investment?

V-Mart Retail Limited has not done too badly by shareholders, with a total return of 2.7%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

While it's true that shareholders have seen decent returns, it's hard to overlook the lack of earnings growth and this makes us wonder if the current returns can continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at V-Mart Retail.

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.

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