We Think Jet Freight Logistics Limited's (NSE:JETFREIGHT) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Jet Freight Logistics will host its Annual General Meeting on 21st of September
• Salary of ₹3.84m is part of CEO Richard Theknath's total remuneration
• The total compensation is 123% higher than the average for the industry
• Over the past three years, Jet Freight Logistics' EPS fell by 14% and over the past three years, the total loss to shareholders 0.5%

Jet Freight Logistics Limited (NSE:JETFREIGHT) has not performed well recently and CEO Richard Theknath will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 21st of September. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Jet Freight Logistics

Comparing Jet Freight Logistics Limited's CEO Compensation With The Industry

Our data indicates that Jet Freight Logistics Limited has a market capitalization of ₹896m, and total annual CEO compensation was reported as ₹11m for the year to March 2024. That's just a smallish increase of 6.9% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹3.8m.

In comparison with other companies in the Indian Logistics industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹5.1m. This suggests that Richard Theknath is paid more than the median for the industry. What's more, Richard Theknath holds ₹209m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹3.8m	₹3.6m	34%
Other	₹7.5m	₹7.0m	66%
Total Compensation	₹11m	₹11m	100%

Speaking on an industry level, nearly 59% of total compensation represents salary, while the remainder of 41% is other remuneration. Jet Freight Logistics 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.

Jet Freight Logistics Limited's Growth

Jet Freight Logistics Limited has reduced its earnings per share by 14% a year over the last three years. It achieved revenue growth of 5.7% over the last year.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Jet Freight Logistics Limited Been A Good Investment?

Since shareholders would have lost about 0.5% over three years, some Jet Freight Logistics Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Jet Freight Logistics (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Important note: Jet Freight Logistics 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.