It's Unlikely That Gujarat Ambuja Exports Limited's (NSE:GAEL) CEO Will See A Huge Pay Rise This Year

Key Insights

• Gujarat Ambuja Exports will host its Annual General Meeting on 31st of August
• Salary of ₹8.40m is part of CEO Manish Gupta's total remuneration
• The overall pay is 1,759% above the industry average
• Gujarat Ambuja Exports' EPS declined by 5.3% over the past three years while total shareholder return over the past three years was 67%

Gujarat Ambuja Exports Limited (NSE:GAEL) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. The upcoming AGM on 31st of August may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

Check out our latest analysis for Gujarat Ambuja Exports

How Does Total Compensation For Manish Gupta Compare With Other Companies In The Industry?

At the time of writing, our data shows that Gujarat Ambuja Exports Limited has a market capitalization of ₹63b, and reported total annual CEO compensation of ₹397m for the year to March 2024. Notably, that's a decrease of 9.8% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹8.4m.

For comparison, other companies in the Indian Food industry with market capitalizations ranging between ₹34b and ₹134b had a median total CEO compensation of ₹21m. Accordingly, our analysis reveals that Gujarat Ambuja Exports Limited pays Manish Gupta north of the industry median. Moreover, Manish Gupta also holds ₹39b worth of Gujarat Ambuja Exports stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹8.4m	₹8.4m	2%
Other	₹389m	₹432m	98%
Total Compensation	₹397m	₹440m	100%

On an industry level, roughly 100% of total compensation represents salary and 0.18484288% is other remuneration. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to Manish Gupta as compared to non-salary compensation over the one-year period examined. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Gujarat Ambuja Exports Limited's Growth

Over the last three years, Gujarat Ambuja Exports Limited has shrunk its earnings per share by 5.3% per year. It achieved revenue growth of 1.1% over the last year.

The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Gujarat Ambuja Exports Limited Been A Good Investment?

Most shareholders would probably be pleased with Gujarat Ambuja Exports Limited for providing a total return of 67% over three years. 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.

To Conclude...

Gujarat Ambuja Exports primarily uses non-salary benefits to reward its CEO. While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Gujarat Ambuja Exports that investors should be aware of in a dynamic business environment.

Switching gears from Gujarat Ambuja Exports, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.