Why We Think The CEO Of Apollo Micro Systems Limited (NSE:APOLLO) May Soon See A Pay Rise

Key Insights

• Apollo Micro Systems' Annual General Meeting to take place on 29th of September
• Total pay for CEO Karunakar Baddam includes ₹18.0m salary
• The total compensation is 32% less than the average for the industry
• Over the past three years, Apollo Micro Systems' EPS grew by 13% and over the past three years, the total shareholder return was 373%

The impressive results at Apollo Micro Systems Limited (NSE:APOLLO) recently will be great news for shareholders. This would be kept in mind at the upcoming AGM on 29th of September 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. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

View our latest analysis for Apollo Micro Systems

How Does Total Compensation For Karunakar Baddam Compare With Other Companies In The Industry?

At the time of writing, our data shows that Apollo Micro Systems Limited has a market capitalization of ₹13b, and reported total annual CEO compensation of ₹18m for the year to March 2023. Notably, that's an increase of 50% over the year before. Notably, the salary of ₹18m is the entirety of the CEO compensation.

In comparison with other companies in the Indian Aerospace & Defense industry with market capitalizations ranging from ₹8.3b to ₹33b, the reported median CEO total compensation was ₹26m. That is to say, Karunakar Baddam is paid under the industry median. Moreover, Karunakar Baddam also holds ₹6.6b worth of Apollo Micro Systems stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	₹18m	₹12m	100%
Other	-	₹22k	-
Total Compensation	₹18m	₹12m	100%

Talking in terms of the industry, salary represented approximately 92% of total compensation out of all the companies we analyzed, while other remuneration made up 8% of the pie. On a company level, Apollo Micro Systems prefers to reward its CEO through a salary, opting not to pay Karunakar Baddam through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Apollo Micro Systems Limited's Growth

Apollo Micro Systems Limited's earnings per share (EPS) grew 13% per year over the last three years. It achieved revenue growth of 9.7% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Apollo Micro Systems Limited Been A Good Investment?

Boasting a total shareholder return of 373% over three years, Apollo Micro Systems Limited has done well by shareholders. 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.

To Conclude...

Apollo Micro Systems pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus 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 an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Apollo Micro Systems (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

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.

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

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.