Here's Why Shareholders May Want To Be Cautious With Increasing Snowman Logistics Limited's (NSE:SNOWMAN) CEO Pay Packet

Key Insights

• Snowman Logistics' Annual General Meeting to take place on 20th of September
• CEO Sunil Nair's total compensation includes salary of ₹14.8m
• Total compensation is 107% above industry average
• Over the past three years, Snowman Logistics' EPS grew by 127% and over the past three years, the total shareholder return was 74%

CEO Sunil Nair has done a decent job of delivering relatively good performance at Snowman Logistics Limited (NSE:SNOWMAN) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 20th of September. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Snowman Logistics

Comparing Snowman Logistics Limited's CEO Compensation With The Industry

Our data indicates that Snowman Logistics Limited has a market capitalization of ₹8.8b, and total annual CEO compensation was reported as ₹15m for the year to March 2023. We note that's an increase of 18% above last year. Notably, the salary which is ₹14.8m, represents most of the total compensation being paid.

For comparison, other companies in the Indian Logistics industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹7.4m. Accordingly, our analysis reveals that Snowman Logistics Limited pays Sunil Nair north of the industry median. What's more, Sunil Nair holds ₹1.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	₹15m	₹13m	97%
Other	₹500k	₹400k	3%
Total Compensation	₹15m	₹13m	100%

Speaking on an industry level, nearly 56% of total compensation represents salary, while the remainder of 44% is other remuneration. Snowman Logistics pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Snowman Logistics Limited's Growth

Over the past three years, Snowman Logistics Limited has seen its earnings per share (EPS) grow by 127% per year. In the last year, its revenue is up 49%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Snowman Logistics Limited Been A Good Investment?

We think that the total shareholder return of 74%, over three years, would leave most Snowman Logistics Limited shareholders smiling. 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...

Sunil receives almost all of their compensation through a salary. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Snowman Logistics (1 is concerning!) that you should be aware of before investing here.

Important note: Snowman 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.