How Much Did Apex Frozen Foods' (NSE:APEX) CEO Pocket Last Year?

Karuturi Murthy became the CEO of Apex Frozen Foods Limited (NSE:APEX) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Apex Frozen Foods pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Apex Frozen Foods

Comparing Apex Frozen Foods Limited's CEO Compensation With the industry

At the time of writing, our data shows that Apex Frozen Foods Limited has a market capitalization of ₹9.6b, and reported total annual CEO compensation of ₹17m for the year to March 2020. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹17m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹3.5m. Hence, we can conclude that Karuturi Murthy is remunerated higher than the industry median. What's more, Karuturi Murthy holds ₹2.8b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. At the company level, Apex Frozen Foods pays Karuturi Murthy solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Apex Frozen Foods Limited's Growth

Apex Frozen Foods Limited has reduced its earnings per share by 7.4% a year over the last three years. Its revenue is down 6.3% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Apex Frozen Foods Limited Been A Good Investment?

Since shareholders would have lost about 61% over three years, some Apex Frozen Foods Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Apex Frozen Foods pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we touched on above, Apex Frozen Foods Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good against shareholder returns, which have been negative for the past three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Apex Frozen Foods that you should be aware of before investing.

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. 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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