Shareholders Will Probably Hold Off On Increasing Transport Corporation of India Limited's (NSE:TCI) CEO Compensation For The Time Being

Key Insights

• Transport Corporation of India to hold its Annual General Meeting on 27th of July
• Total pay for CEO Dharmpal Agarwal includes ₹85.5m salary
• The total compensation is 55% higher than the average for the industry
• Transport Corporation of India's EPS grew by 33% over the past three years while total shareholder return over the past three years was 138%

Performance at Transport Corporation of India Limited (NSE:TCI) has been reasonably good and CEO Dharmpal Agarwal has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 27th of July, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Transport Corporation of India

Comparing Transport Corporation of India Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Transport Corporation of India Limited has a market capitalization of ₹74b, and reported total annual CEO compensation of ₹153m for the year to March 2024. We note that's an increase of 14% above last year. Notably, the salary which is ₹85.5m, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the Indian Logistics industry with market capitalizations ranging from ₹33b to ₹134b, the reported median CEO total compensation was ₹99m. Accordingly, our analysis reveals that Transport Corporation of India Limited pays Dharmpal Agarwal north of the industry median. Furthermore, Dharmpal Agarwal directly owns ₹7.5b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹86m	₹70m	56%
Other	₹68m	₹64m	44%
Total Compensation	₹153m	₹135m	100%

On an industry level, roughly 56% of total compensation represents salary and 44% is other remuneration. There isn't a significant difference between Transport Corporation of India and the broader market, in terms of salary allocation in the overall compensation package. 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.

Transport Corporation of India Limited's Growth

Transport Corporation of India Limited's earnings per share (EPS) grew 33% per year over the last three years. Its revenue is up 6.4% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Transport Corporation of India Limited Been A Good Investment?

Most shareholders would probably be pleased with Transport Corporation of India Limited for providing a total return of 138% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Transport Corporation of India that you should be aware of before investing.

Important note: Transport Corporation of India 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.

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