We Think Nureca Limited's (NSE:NURECA) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Nureca's Annual General Meeting to take place on 18th of July
• Salary of ₹18.8m is part of CEO Aryan Goyal's total remuneration
• Total compensation is 187% above industry average
• Nureca's three-year loss to shareholders was 83% while its EPS was down 113% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Nureca Limited (NSE:NURECA) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 18th of July. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Nureca

How Does Total Compensation For Aryan Goyal Compare With Other Companies In The Industry?

According to our data, Nureca Limited has a market capitalization of ₹2.8b, and paid its CEO total annual compensation worth ₹19m over the year to March 2024. That's a notable increase of 18% on last year. Notably, the salary of ₹19m is the entirety of the CEO compensation.

In comparison with other companies in the India Medical Equipment industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹6.5m. Hence, we can conclude that Aryan Goyal is remunerated higher than the industry median. Moreover, Aryan Goyal also holds ₹879m worth of Nureca 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	₹19m	₹16m	100%
Other	-	-	-
Total Compensation	₹19m	₹16m	100%

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. At the company level, Nureca pays Aryan Goyal 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.

A Look at Nureca Limited's Growth Numbers

Nureca Limited has reduced its earnings per share by 113% a year over the last three years. It saw its revenue drop 17% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Nureca Limited Been A Good Investment?

The return of -83% over three years would not have pleased Nureca Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Nureca pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for Nureca you should be aware of, and 1 of them is concerning.

Important note: Nureca 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.

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