Here's Why Shareholders May Want To Be Cautious With Increasing TCI Express Limited's (NSE:TCIEXP) CEO Pay Packet

Key Insights

• TCI Express to hold its Annual General Meeting on 13th of August
• Salary of ₹37.2m is part of CEO Chander Agarwal's total remuneration
• The overall pay is 595% above the industry average
• Over the past three years, TCI Express' EPS grew by 9.4% and over the past three years, the total loss to shareholders 14%

As many shareholders of TCI Express Limited (NSE:TCIEXP) will be aware, they have not made a gain on their investment in the past three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 13th of August. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for TCI Express

Comparing TCI Express Limited's CEO Compensation With The Industry

At the time of writing, our data shows that TCI Express Limited has a market capitalization of ₹44b, and reported total annual CEO compensation of ₹106m for the year to March 2024. That's just a smallish increase of 6.8% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹37m.

In comparison with other companies in the Indian Logistics industry with market capitalizations ranging from ₹17b to ₹67b, the reported median CEO total compensation was ₹15m. Hence, we can conclude that Chander Agarwal is remunerated higher than the industry median. Moreover, Chander Agarwal also holds ₹1.5b worth of TCI Express 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	₹37m	₹33m	35%
Other	₹69m	₹66m	65%
Total Compensation	₹106m	₹99m	100%

On an industry level, roughly 55% of total compensation represents salary and 45% is other remuneration. TCI Express pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at TCI Express Limited's Growth Numbers

TCI Express Limited has seen its earnings per share (EPS) increase by 9.4% a year over the past three years. In the last year, its revenue is up 1.0%.

We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has TCI Express Limited Been A Good Investment?

Given the total shareholder loss of 14% over three years, many shareholders in TCI Express Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for TCI Express that you should be aware of before investing.

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