Consumer Durables News

We Think Some Shareholders May Hesitate To Increase VIP Clothing Limited’s (NSE:VIPCLOTHNG) CEO Compensation

Under the guidance of CEO Sunil Pathare, VIP Clothing Limited (NSE:VIPCLOTHNG) has performed reasonably well 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 23 September 2022. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for VIP Clothing

How Does Total Compensation For Sunil Pathare Compare With Other Companies In The Industry?

At the time of writing, our data shows that VIP Clothing Limited has a market capitalization of ₹2.7b, and reported total annual CEO compensation of ₹8.5m for the year to March 2022. We note that’s an increase of 11% above last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹8.5m.

On comparing similar-sized companies in the industry with market capitalizations below ₹16b, we found that the median total CEO compensation was ₹3.6m. This suggests that Sunil Pathare is paid more than the median for the industry. Furthermore, Sunil Pathare directly owns ₹14m worth of shares in the company, implying that they are deeply invested in the company’s success.

Component 2022 2021 Proportion (2022)
Salary ₹8.5m ₹7.7m 100%
Total Compensation ₹8.5m ₹7.7m 100%

Talking in terms of the industry, salary represented approximately 100% of total compensation out of all the companies we analyzed, while other remuneration made up 0.2687% of the pie. At the company level, VIP Clothing pays Sunil Pathare solely through a salary, preferring to go down a conventional route. 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.

NSEI:VIPCLOTHNG CEO Compensation September 17th 2022

A Look at VIP Clothing Limited’s Growth Numbers

VIP Clothing Limited’s earnings per share (EPS) grew 27% per year over the last three years. In the last year, its revenue is up 41%.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has VIP Clothing Limited Been A Good Investment?

Boasting a total shareholder return of 186% over three years, VIP Clothing Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude…

VIP Clothing pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 2 which don’t sit too well with us) in VIP Clothing we think you should know about.

Switching gears from VIP Clothing, if you’re hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.

Valuation is complex, but we’re helping make it simple.

Find out whether VIP Clothing is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

Source link