It's Unlikely That ADF Foods Limited's (NSE:ADFFOODS) CEO Will See A Huge Pay Rise This Year

CEO Bimal Thakkar has done a decent job of delivering relatively good performance at ADF Foods Limited (NSE:ADFFOODS) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 24 September 2021. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for ADF Foods

Comparing ADF Foods Limited's CEO Compensation With the industry

According to our data, ADF Foods Limited has a market capitalization of ₹19b, and paid its CEO total annual compensation worth ₹28m over the year to March 2021. That's a notable decrease of 12% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹804k.

On examining similar-sized companies in the industry with market capitalizations between ₹7.4b and ₹29b, we discovered that the median CEO total compensation of that group was ₹17m. Accordingly, our analysis reveals that ADF Foods Limited pays Bimal Thakkar north of the industry median. Furthermore, Bimal Thakkar directly owns ₹1.7b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	₹804k	₹7.6m	3%
Other	₹27m	₹24m	97%
Total Compensation	₹28m	₹32m	100%

On an industry level, roughly 100% of total compensation represents salary and 0.1674% is other remuneration. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to Bimal Thakkar as compared to non-salary compensation over the one-year period examined. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ADF Foods Limited's Growth

Over the past three years, ADF Foods Limited has seen its earnings per share (EPS) grow by 43% per year. Its revenue is up 37% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has ADF Foods Limited Been A Good Investment?

We think that the total shareholder return of 307%, over three years, would leave most ADF Foods Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

ADF Foods primarily uses non-salary benefits to reward its CEO. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling ADF Foods (free visualization of insider trades).

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.
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