How Much Is Avanti Feeds Limited (NSE:AVANTIFEED) CEO Getting Paid?

This article will reflect on the compensation paid to Alluri Kumar who has served as CEO of Avanti Feeds Limited (NSE:AVANTIFEED) since 2002. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Avanti Feeds

How Does Total Compensation For Alluri Kumar Compare With Other Companies In The Industry?

Our data indicates that Avanti Feeds Limited has a market capitalization of ₹67b, and total annual CEO compensation was reported as ₹194m for the year to March 2020. Notably, that's an increase of 16% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹32m.

On examining similar-sized companies in the industry with market capitalizations between ₹29b and ₹116b, we discovered that the median CEO total compensation of that group was ₹38m. Hence, we can conclude that Alluri Kumar is remunerated higher than the industry median. What's more, Alluri Kumar holds ₹8.0b 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. Avanti Feeds sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Avanti Feeds Limited's Growth

Over the last three years, Avanti Feeds Limited has shrunk its earnings per share by 5.3% per year. In the last year, its revenue is up 2.5%.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Avanti Feeds Limited Been A Good Investment?

Given the total shareholder loss of 35% over three years, many shareholders in Avanti Feeds Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Alluri is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Avanti Feeds that investors should think about before committing capital to this stock.

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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