How Is Avanti Feeds' (NSE:AVANTIFEED) CEO Compensated?

Alluri Kumar has been the CEO of Avanti Feeds Limited (NSE:AVANTIFEED) since 2002, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Avanti Feeds.

Check out our latest analysis for Avanti Feeds

Comparing Avanti Feeds Limited's CEO Compensation With the industry

At the time of writing, our data shows that Avanti Feeds Limited has a market capitalization of ₹65b, and reported total annual CEO compensation of ₹194m for the year to March 2020. That's a notable increase of 16% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹32m.

For comparison, other companies in the same industry with market capitalizations ranging between ₹30b and ₹120b had a median total CEO compensation of ₹35m. Accordingly, our analysis reveals that Avanti Feeds Limited pays Alluri Kumar north of the industry median. What's more, Alluri Kumar holds ₹7.9b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Avanti Feeds sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Avanti Feeds Limited's Growth Numbers

Over the past three years, Avanti Feeds Limited has seen its earnings per share (EPS) grow by 17% per year. It achieved revenue growth of 18% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Avanti Feeds Limited Been A Good Investment?

Given the total shareholder loss of 5.1% over three years, many shareholders in Avanti Feeds Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we touched on above, Avanti Feeds Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, we must not forget that the EPS growth has been very strong, but it's disappointing to see negative shareholder returns over the same period. Considering overall performance, we can't say Alluri is underpaid, in fact compensation is definitely on the higher side.

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 Avanti Feeds (1 is concerning!) 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.

When trading Avanti Feeds or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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