We Discuss Why Mahindra Logistics Limited's (NSE:MAHLOG) CEO Compensation May Be Closely Reviewed

Key Insights

• Mahindra Logistics' Annual General Meeting to take place on 22nd of July
• CEO Rampraveen Swaminathan's total compensation includes salary of ₹13.5m
• Total compensation is 190% above industry average
• Mahindra Logistics' EPS declined by 79% over the past three years while total shareholder loss over the past three years was 8.1%

Shareholders will probably not be too impressed with the underwhelming results at Mahindra Logistics Limited (NSE:MAHLOG) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 22nd of July. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Mahindra Logistics

Comparing Mahindra Logistics Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Mahindra Logistics Limited has a market capitalization of ₹38b, and reported total annual CEO compensation of ₹43m for the year to March 2024. That's a notable decrease of 10% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹14m.

For comparison, other companies in the Indian Logistics industry with market capitalizations ranging between ₹17b and ₹67b had a median total CEO compensation of ₹15m. Accordingly, our analysis reveals that Mahindra Logistics Limited pays Rampraveen Swaminathan north of the industry median. Furthermore, Rampraveen Swaminathan directly owns ₹32m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹14m	₹13m	31%
Other	₹30m	₹36m	69%
Total Compensation	₹43m	₹48m	100%

Speaking on an industry level, nearly 56% of total compensation represents salary, while the remainder of 44% is other remuneration. In Mahindra Logistics' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Mahindra Logistics Limited's Growth Numbers

Mahindra Logistics Limited has reduced its earnings per share by 79% a year over the last three years. It achieved revenue growth of 7.4% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Mahindra Logistics Limited Been A Good Investment?

Since shareholders would have lost about 8.1% over three years, some Mahindra Logistics Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for Mahindra Logistics (1 is significant!) that you should be aware of before investing here.

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