Shareholders May Be More Conservative With Max Healthcare Institute Limited's (NSE:MAXHEALTH) CEO Compensation For Now

Key Insights

• Max Healthcare Institute to hold its Annual General Meeting on 20th of September
• Salary of ₹197.2m is part of CEO Abhay Soi's total remuneration
• The total compensation is 262% higher than the average for the industry
• Max Healthcare Institute's EPS grew by 46% over the past three years while total shareholder return over the past three years was 140%

Performance at Max Healthcare Institute Limited (NSE:MAXHEALTH) has been reasonably good and CEO Abhay Soi has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 20th of September, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Max Healthcare Institute

How Does Total Compensation For Abhay Soi Compare With Other Companies In The Industry?

Our data indicates that Max Healthcare Institute Limited has a market capitalization of ₹883b, and total annual CEO compensation was reported as ₹247m for the year to March 2024. We note that's an increase of 77% above last year. Notably, the salary which is ₹197.2m, represents most of the total compensation being paid.

For comparison, other companies in the Indian Healthcare industry with market capitalizations above ₹671b, reported a median total CEO compensation of ₹68m. Accordingly, our analysis reveals that Max Healthcare Institute Limited pays Abhay Soi north of the industry median. Moreover, Abhay Soi also holds ₹210b worth of Max Healthcare Institute 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	₹197m	₹140m	80%
Other	₹50m	-	20%
Total Compensation	₹247m	₹140m	100%

On an industry level, roughly 91% of total compensation represents salary and 9% is other remuneration. Max Healthcare Institute sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Max Healthcare Institute Limited's Growth

Max Healthcare Institute Limited has seen its earnings per share (EPS) increase by 46% a year over the past three years. Its revenue is up 18% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Max Healthcare Institute Limited Been A Good Investment?

Most shareholders would probably be pleased with Max Healthcare Institute Limited for providing a total return of 140% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

So you may want to check if insiders are buying Max Healthcare Institute shares with their own money (free access).

Important note: Max Healthcare Institute 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.