Why We Think The CEO Of Agarwal Industrial Corporation Limited (NSE:AGARIND) May Soon See A Pay Rise

Key Insights

• Agarwal Industrial's Annual General Meeting to take place on 13th of September
• CEO Jaiprakash Agarwal's total compensation includes salary of ₹7.50m
• Total compensation is 60% below industry average
• Agarwal Industrial's total shareholder return over the past three years was 293% while its EPS grew by 18% over the past three years

Shareholders will be pleased by the impressive results for Agarwal Industrial Corporation Limited (NSE:AGARIND) recently and CEO Jaiprakash Agarwal has played a key role. At the upcoming AGM on 13th of September, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

View our latest analysis for Agarwal Industrial

Comparing Agarwal Industrial Corporation Limited's CEO Compensation With The Industry

According to our data, Agarwal Industrial Corporation Limited has a market capitalization of ₹18b, and paid its CEO total annual compensation worth ₹7.5m over the year to March 2024. There was no change in the compensation compared to last year. Notably, the salary of ₹7.5m is the entirety of the CEO compensation.

On comparing similar companies from the Indian Chemicals industry with market caps ranging from ₹8.4b to ₹34b, we found that the median CEO total compensation was ₹19m. This suggests that Jaiprakash Agarwal is paid below the industry median. Moreover, Jaiprakash Agarwal also holds ₹1.3b worth of Agarwal Industrial 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	₹7.5m	₹7.5m	100%
Other	-	-	-
Total Compensation	₹7.5m	₹7.5m	100%

On an industry level, roughly 88% of total compensation represents salary and 12% is other remuneration. Speaking on a company level, Agarwal Industrial prefers to tread along a traditional path, disbursing all compensation through a salary. 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.

Agarwal Industrial Corporation Limited's Growth

Over the past three years, Agarwal Industrial Corporation Limited has seen its earnings per share (EPS) grow by 18% per year. Its revenue is up 6.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Agarwal Industrial Corporation Limited Been A Good Investment?

We think that the total shareholder return of 293%, over three years, would leave most Agarwal Industrial Corporation Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Agarwal Industrial rewards its CEO solely through a salary, ignoring non-salary benefits completely. Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Agarwal Industrial that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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

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.