We Think Shareholders Are Less Likely To Approve A Pay Rise For Advanced Enzyme Technologies Limited's (NSE:ADVENZYMES) CEO For Now

Key Insights

• Advanced Enzyme Technologies' Annual General Meeting to take place on 25th of July
• Salary of ₹6.69m is part of CEO Mukund Kabra's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Advanced Enzyme Technologies' EPS fell by 3.0% and over the past three years, the total loss to shareholders 2.1%

As many shareholders of Advanced Enzyme Technologies Limited (NSE:ADVENZYMES) will be aware, they have not made a gain on their investment in the past three years. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 25th of July, where they can impact on future company performance by voting on resolutions, including executive compensation. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

View our latest analysis for Advanced Enzyme Technologies

Comparing Advanced Enzyme Technologies Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Advanced Enzyme Technologies Limited has a market capitalization of ₹42b, and reported total annual CEO compensation of ₹29m for the year to March 2024. Notably, that's an increase of 21% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹6.7m.

For comparison, other companies in the Indian Chemicals industry with market capitalizations ranging between ₹17b and ₹67b had a median total CEO compensation of ₹25m. So it looks like Advanced Enzyme Technologies compensates Mukund Kabra in line with the median for the industry. Furthermore, Mukund Kabra directly owns ₹687m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹6.7m	₹6.1m	23%
Other	₹23m	₹18m	77%
Total Compensation	₹29m	₹24m	100%

Talking in terms of the industry, salary represented approximately 86% of total compensation out of all the companies we analyzed, while other remuneration made up 14% of the pie. Advanced Enzyme Technologies pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Advanced Enzyme Technologies Limited's Growth

Advanced Enzyme Technologies Limited has reduced its earnings per share by 3.0% a year over the last three years. It achieved revenue growth of 15% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Advanced Enzyme Technologies Limited Been A Good Investment?

Since shareholders would have lost about 2.1% over three years, some Advanced Enzyme Technologies Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In 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 is in line with their expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Advanced Enzyme Technologies that investors should look into moving forward.

Important note: Advanced Enzyme Technologies 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