IFB Agro Industries Limited's (NSE:IFBAGRO) CEO Compensation Is Looking A Bit Stretched At The Moment

As many shareholders of IFB Agro Industries Limited (NSE:IFBAGRO) will be aware, they have not made a gain on their investment in the past three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 06 August 2021. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for IFB Agro Industries

How Does Total Compensation For Arup Banerjee Compare With Other Companies In The Industry?

At the time of writing, our data shows that IFB Agro Industries Limited has a market capitalization of ₹5.7b, and reported total annual CEO compensation of ₹25m for the year to March 2021. That's a notable increase of 27% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹25m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹3.6m. Hence, we can conclude that Arup Banerjee is remunerated higher than the industry median.

Component	2021	2020	Proportion (2021)
Salary	₹25m	₹20m	100%
Other	-	-	-
Total Compensation	₹25m	₹20m	100%

Talking in terms of the industry, salary represented approximately 100% of total compensation out of all the companies we analyzed, while other remuneration made up 0.02195% of the pie. At the company level, IFB Agro Industries pays Arup Banerjee solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

IFB Agro Industries Limited's Growth

IFB Agro Industries Limited's earnings per share (EPS) grew 17% per year over the last three years. Its revenue is down 29% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has IFB Agro Industries Limited Been A Good Investment?

With a three year total loss of 14% for the shareholders, IFB Agro Industries Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

IFB Agro Industries pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 3 warning signs for IFB Agro Industries you should be aware of, and 1 of them makes us a bit uncomfortable.

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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