Here's Why Shareholders Should Examine Nath Bio-Genes (India) Limited's (NSE:NATHBIOGEN) CEO Compensation Package More Closely

Key Insights

• Nath Bio-Genes (India) will host its Annual General Meeting on 17th of August
• Total pay for CEO Satish Kagliwal includes ₹6.60m salary
• The total compensation is 84% higher than the average for the industry
• Over the past three years, Nath Bio-Genes (India)'s EPS fell by 12% and over the past three years, the total loss to shareholders 35%

The results at Nath Bio-Genes (India) Limited (NSE:NATHBIOGEN) have been quite disappointing recently and CEO Satish Kagliwal bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 17th of August. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Nath Bio-Genes (India)

Comparing Nath Bio-Genes (India) Limited's CEO Compensation With The Industry

According to our data, Nath Bio-Genes (India) Limited has a market capitalization of ₹4.3b, and paid its CEO total annual compensation worth ₹6.6m over the year to March 2024. Notably, that's an increase of 38% over the year before. Notably, the salary of ₹6.6m is the entirety of the CEO compensation.

For comparison, other companies in the Indian Food industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹3.6m. Accordingly, our analysis reveals that Nath Bio-Genes (India) Limited pays Satish Kagliwal north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	₹6.6m	₹4.8m	100%
Other	-	-	-
Total Compensation	₹6.6m	₹4.8m	100%

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. On a company level, Nath Bio-Genes (India) prefers to reward its CEO through a salary, opting not to pay Satish Kagliwal through non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Nath Bio-Genes (India) Limited's Growth

Over the last three years, Nath Bio-Genes (India) Limited has shrunk its earnings per share by 12% per year. Its revenue is up 4.3% over the last year.

Few shareholders would be pleased to read that EPS have declined. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Nath Bio-Genes (India) Limited Been A Good Investment?

With a total shareholder return of -35% over three years, Nath Bio-Genes (India) Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Nath Bio-Genes (India) pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Nath Bio-Genes (India) (1 is concerning!) that you should be aware of before investing here.

Important note: Nath Bio-Genes (India) is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.