We Take A Look At Whether AIA Engineering Limited's (NSE:AIAENG) CEO May Be Underpaid
Key Insights
- AIA Engineering's Annual General Meeting to take place on 9th of September
- CEO Bhadresh Shah's total compensation includes salary of ā¹10.2m
- Total compensation is 80% below industry average
- Over the past three years, AIA Engineering's EPS grew by 24% and over the past three years, the total shareholder return was 110%
The impressive results at AIA Engineering Limited (NSE:AIAENG) recently will be great news for shareholders. At the upcoming AGM on 9th of September, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.
Check out our latest analysis for AIA Engineering
Comparing AIA Engineering Limited's CEO Compensation With The Industry
According to our data, AIA Engineering Limited has a market capitalization of ā¹408b, and paid its CEO total annual compensation worth ā¹13m over the year to March 2024. Notably, that's an increase of 16% over the year before. Notably, the salary which is ā¹10.2m, represents most of the total compensation being paid.
On examining similar-sized companies in the Indian Machinery industry with market capitalizations between ā¹336b and ā¹1.0t, we discovered that the median CEO total compensation of that group was ā¹63m. In other words, AIA Engineering pays its CEO lower than the industry median. Furthermore, Bhadresh Shah directly owns ā¹238b worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | ā¹10m | ā¹10m | 79% |
| Other | ā¹2.7m | ā¹912k | 21% |
| Total Compensation | ā¹13m | ā¹11m | 100% |
On an industry level, around 91% of total compensation represents salary and 9% is other remuneration. AIA Engineering sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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.
AIA Engineering Limited's Growth
AIA Engineering Limited's earnings per share (EPS) grew 24% per year over the last three years. In the last year, its revenue is down 8.6%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has AIA Engineering Limited Been A Good Investment?
We think that the total shareholder return of 110%, over three years, would leave most AIA Engineering Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
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. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
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 AIA Engineering that investors should think about before committing capital to this stock.
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.
About NSEI:AIAENG
AIA Engineering
Designs, develops, produces, installs, and services high chromium wear, corrosion, and abrasion resistant castings in India and internationally.
Excellent balance sheet average dividend payer.
