Shareholders May Be More Conservative With Axiscades Technologies Limited's (NSE:AXISCADES) CEO Compensation For Now

The underwhelming share price performance of Axiscades Technologies Limited (NSE:AXISCADES) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 28 September 2021. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Axiscades Technologies

Comparing Axiscades Technologies Limited's CEO Compensation With the industry

According to our data, Axiscades Technologies Limited has a market capitalization of ₹2.7b, and paid its CEO total annual compensation worth ₹7.2m over the year to March 2021. That's a notable decrease of 36% on last year. We note that the salary portion, which stands at ₹5.42m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹4.2m. Accordingly, our analysis reveals that Axiscades Technologies Limited pays Sharadhi Babupampapathy north of the industry median.

Component	2021	2020	Proportion (2021)
Salary	₹5.4m	₹6.1m	75%
Other	₹1.8m	₹5.2m	25%
Total Compensation	₹7.2m	₹11m	100%

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. Axiscades Technologies pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Axiscades Technologies Limited's Growth

Over the past three years, Axiscades Technologies Limited has seen its earnings per share (EPS) grow by 32% per year. In the last year, its revenue is down 15%.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Axiscades Technologies Limited Been A Good Investment?

Since shareholders would have lost about 16% over three years, some Axiscades Technologies Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in Axiscades Technologies we think you should know about.

Important note: Axiscades Technologies is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.
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