Shareholders May Be More Conservative With AYM Syntex Limited's (NSE:AYMSYNTEX) CEO Compensation For Now

Key Insights

• AYM Syntex to hold its Annual General Meeting on 25th of September
• CEO Abhishek Mandawewala's total compensation includes salary of ₹18.3m
• The overall pay is 485% above the industry average
• AYM Syntex's EPS declined by 27% over the past three years while total shareholder return over the past three years was 81%

The share price of AYM Syntex Limited (NSE:AYMSYNTEX) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 25th of September. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for AYM Syntex

How Does Total Compensation For Abhishek Mandawewala Compare With Other Companies In The Industry?

According to our data, AYM Syntex Limited has a market capitalization of ₹9.7b, and paid its CEO total annual compensation worth ₹21m over the year to March 2024. Notably, that's a decrease of 19% over the year before. We note that the salary portion, which stands at ₹18.3m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Indian Luxury industry with market capitalizations below ₹17b, we found that the median total CEO compensation was ₹3.6m. Hence, we can conclude that Abhishek Mandawewala is remunerated higher than the industry median.

Component	2024	2023	Proportion (2024)
Salary	₹18m	₹16m	87%
Other	₹2.7m	₹9.8m	13%
Total Compensation	₹21m	₹26m	100%

On an industry level, roughly 98% of total compensation represents salary and 2% is other remuneration. AYM Syntex 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.

AYM Syntex Limited's Growth

Over the last three years, AYM Syntex Limited has shrunk its earnings per share by 27% per year. In the last year, its revenue changed by just 0.4%.

Few shareholders would be pleased to read that EPS have declined. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has AYM Syntex Limited Been A Good Investment?

We think that the total shareholder return of 81%, over three years, would leave most AYM Syntex 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...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for AYM Syntex you should be aware of, and 2 of them don't sit too well with us.

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.

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.