Why We Think Asahi India Glass Limited's (NSE:ASAHIINDIA) CEO Compensation Is Not Excessive At All

Key Insights

• Asahi India Glass will host its Annual General Meeting on 4th of September
• CEO Sanjay Labroo's total compensation includes salary of ₹35.4m
• Total compensation is similar to the industry average
• Asahi India Glass' total shareholder return over the past three years was 86% while its EPS grew by 9.4% over the past three years

Under the guidance of CEO Sanjay Labroo, Asahi India Glass Limited (NSE:ASAHIINDIA) has performed reasonably well recently. As shareholders go into the upcoming AGM on 4th of September, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

See our latest analysis for Asahi India Glass

Comparing Asahi India Glass Limited's CEO Compensation With The Industry

Our data indicates that Asahi India Glass Limited has a market capitalization of ₹156b, and total annual CEO compensation was reported as ₹56m for the year to March 2024. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at ₹35.4m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the Indian Auto Components industry with market caps ranging from ₹84b to ₹269b, we found that the median CEO total compensation was ₹69m. This suggests that Asahi India Glass remunerates its CEO largely in line with the industry average. Furthermore, Sanjay Labroo directly owns ₹21b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹35m	₹31m	63%
Other	₹21m	₹25m	37%
Total Compensation	₹56m	₹57m	100%

On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. Asahi India Glass sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Asahi India Glass Limited's Growth Numbers

Asahi India Glass Limited's earnings per share (EPS) grew 9.4% per year over the last three years. It achieved revenue growth of 5.2% over the last year.

We're not particularly impressed by the revenue growth, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Asahi India Glass Limited Been A Good Investment?

Boasting a total shareholder return of 86% over three years, Asahi India Glass 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.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Asahi India Glass that investors should be aware of in a dynamic business environment.

Switching gears from Asahi India Glass, 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.

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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.