This Is The Reason Why We Think Adani Enterprises Limited's (NSE:ADANIENT) CEO Might Be Underpaid

Key Insights

• Adani Enterprises' Annual General Meeting to take place on 24th of June
• CEO Rajeshbhai Adani's total compensation includes salary of ₹32.6m
• The total compensation is 81% less than the average for the industry
• Adani Enterprises' EPS grew by 48% over the past three years while total shareholder return over the past three years was 112%

Shareholders will be pleased by the impressive results for Adani Enterprises Limited (NSE:ADANIENT) recently and CEO Rajeshbhai Adani has played a key role. This would be kept in mind at the upcoming AGM on 24th of June which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

See our latest analysis for Adani Enterprises

Comparing Adani Enterprises Limited's CEO Compensation With The Industry

Our data indicates that Adani Enterprises Limited has a market capitalization of ₹3.7t, and total annual CEO compensation was reported as ₹84m for the year to March 2024. We note that's an increase of 49% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹33m.

On comparing similar companies in the India Trade Distributors industry with market capitalizations above ₹668b, we found that the median total CEO compensation was ₹449m. That is to say, Rajeshbhai Adani is paid under the industry median.

Component	2024	2023	Proportion (2024)
Salary	₹33m	₹32m	39%
Other	₹51m	₹24m	61%
Total Compensation	₹84m	₹56m	100%

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Adani Enterprises pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Adani Enterprises Limited's Growth Numbers

Adani Enterprises Limited has seen its earnings per share (EPS) increase by 48% a year over the past three years. It saw its revenue drop 24% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Adani Enterprises Limited Been A Good Investment?

Boasting a total shareholder return of 112% over three years, Adani Enterprises Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

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. That's why we did some digging and identified 1 warning sign for Adani Enterprises that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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