Here's Why Shareholders May Consider Paying Panache Digilife Limited's (NSE:PANACHE) CEO A Little More

Key Insights

• Panache Digilife will host its Annual General Meeting on 26th of September
• CEO Amit Rambhia's total compensation includes salary of ₹4.20m
• Total compensation is 51% below industry average
• Over the past three years, Panache Digilife's EPS fell by 49% and over the past three years, the total shareholder return was 175%

Shareholders will probably not be disappointed by the robust results at Panache Digilife Limited (NSE:PANACHE) recently and they will be keeping this in mind as they go into the AGM on 26th of September. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

See our latest analysis for Panache Digilife

Comparing Panache Digilife Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Panache Digilife Limited has a market capitalization of ₹1.9b, and reported total annual CEO compensation of ₹4.2m for the year to March 2024. Notably, that's an increase of 33% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹4.2m.

In comparison with other companies in the India Tech industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹8.5m. This suggests that Amit Rambhia is paid below the industry median. Moreover, Amit Rambhia also holds ₹434m worth of Panache Digilife 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	₹4.2m	₹3.2m	100%
Other	-	-	-
Total Compensation	₹4.2m	₹3.2m	100%

Talking in terms of the industry, salary represented approximately 79% of total compensation out of all the companies we analyzed, while other remuneration made up 21% of the pie. On a company level, Panache Digilife prefers to reward its CEO through a salary, opting not to pay Amit Rambhia through non-salary benefits. 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.

A Look at Panache Digilife Limited's Growth Numbers

Over the last three years, Panache Digilife Limited has shrunk its earnings per share by 49% per year. It achieved revenue growth of 15% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Panache Digilife Limited Been A Good Investment?

Boasting a total shareholder return of 175% over three years, Panache Digilife 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.

In Summary...

Panache Digilife pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Panache Digilife you should be aware of, and 2 of them can't be ignored.

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.