We Think Shareholders May Consider Being More Generous With AVT Natural Products Limited's (NSE:AVTNPL) CEO Compensation Package

Key Insights

• AVT Natural Products to hold its Annual General Meeting on 9th of August
• Salary of ₹7.32m is part of CEO B. Kumar's total remuneration
• Total compensation is 36% below industry average
• AVT Natural Products' EPS grew by 5.6% over the past three years while total shareholder return over the past three years was 25%

Shareholders will probably not be disappointed by the robust results at AVT Natural Products Limited (NSE:AVTNPL) recently and they will be keeping this in mind as they go into the AGM on 9th of August. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

Check out our latest analysis for AVT Natural Products

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

According to our data, AVT Natural Products Limited has a market capitalization of ₹13b, and paid its CEO total annual compensation worth ₹9.9m over the year to March 2024. That's just a smallish increase of 5.4% on last year. In particular, the salary of ₹7.32m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Indian Food industry with market capitalizations ranging between ₹8.4b and ₹34b had a median total CEO compensation of ₹15m. That is to say, B. Kumar is paid under the industry median.

Component	2024	2023	Proportion (2024)
Salary	₹7.3m	₹7.1m	74%
Other	₹2.6m	₹2.4m	26%
Total Compensation	₹9.9m	₹9.4m	100%

On an industry level, roughly 100% of total compensation represents salary and 0.4071893% is other remuneration. AVT Natural Products 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.

AVT Natural Products Limited's Growth

AVT Natural Products Limited's earnings per share (EPS) grew 5.6% per year over the last three years. It saw its revenue drop 11% over the last year.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 AVT Natural Products Limited Been A Good Investment?

AVT Natural Products Limited has generated a total shareholder return of 25% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

The company's overall performance, while not bad, could be better. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for AVT Natural Products that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com