Increases to Aarti Surfactants Limited's (NSE:AARTISURF) CEO Compensation Might Cool off for now

Key Insights

• Aarti Surfactants will host its Annual General Meeting on 23rd of September
• Total pay for CEO Nikhil Desai includes ₹8.32m salary
• The total compensation is 119% higher than the average for the industry
• Aarti Surfactants' three-year loss to shareholders was 39% while its EPS grew by 43% over the past three years

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The underwhelming share price performance of Aarti Surfactants Limited (NSE:AARTISURF) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 23rd of September. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. 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 Aarti Surfactants

How Does Total Compensation For Nikhil Desai Compare With Other Companies In The Industry?

According to our data, Aarti Surfactants Limited has a market capitalization of ₹4.3b, and paid its CEO total annual compensation worth ₹13m over the year to March 2025. We note that's a decrease of 24% compared to last year. We note that the salary portion, which stands at ₹8.32m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Indian Chemicals industry with market capitalizations under ₹18b, the reported median total CEO compensation was ₹6.1m. Accordingly, our analysis reveals that Aarti Surfactants Limited pays Nikhil Desai north of the industry median. Moreover, Nikhil Desai also holds ₹134m worth of Aarti Surfactants stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 84% of total compensation represents salary and 16% is other remuneration. In Aarti Surfactants' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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 Aarti Surfactants Limited's Growth Numbers

Aarti Surfactants Limited's earnings per share (EPS) grew 43% per year over the last three years. It achieved revenue growth of 25% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Aarti Surfactants Limited Been A Good Investment?

Few Aarti Surfactants Limited shareholders would feel satisfied with the return of -39% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

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. We did our research and identified 4 warning signs (and 1 which is concerning) in Aarti Surfactants we think you should know about.

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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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.