Should Shareholders Reconsider Alkyl Amines Chemicals Limited's (NSE:ALKYLAMINE) CEO Compensation Package?

Key Insights

• Alkyl Amines Chemicals will host its Annual General Meeting on 2nd of July
• Total pay for CEO Yogesh Kothari includes ₹46.6m salary
• The overall pay is 239% above the industry average
• Alkyl Amines Chemicals' EPS declined by 20% over the past three years while total shareholder loss over the past three years was 40%

Shareholders will probably not be too impressed with the underwhelming results at Alkyl Amines Chemicals Limited (NSE:ALKYLAMINE) recently. At the upcoming AGM on 2nd of July, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Alkyl Amines Chemicals

Comparing Alkyl Amines Chemicals Limited's CEO Compensation With The Industry

Our data indicates that Alkyl Amines Chemicals Limited has a market capitalization of ₹108b, and total annual CEO compensation was reported as ₹115m for the year to March 2024. We note that's a decrease of 34% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹47m.

On examining similar-sized companies in the Indian Chemicals industry with market capitalizations between ₹83b and ₹267b, we discovered that the median CEO total compensation of that group was ₹34m. Accordingly, our analysis reveals that Alkyl Amines Chemicals Limited pays Yogesh Kothari north of the industry median. Furthermore, Yogesh Kothari directly owns ₹62b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹47m	₹41m	41%
Other	₹68m	₹133m	59%
Total Compensation	₹115m	₹174m	100%

Speaking on an industry level, nearly 86% of total compensation represents salary, while the remainder of 14% is other remuneration. In Alkyl Amines Chemicals' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Alkyl Amines Chemicals Limited's Growth

Over the last three years, Alkyl Amines Chemicals Limited has shrunk its earnings per share by 20% per year. It saw its revenue drop 14% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Alkyl Amines Chemicals Limited Been A Good Investment?

Few Alkyl Amines Chemicals Limited shareholders would feel satisfied with the return of -40% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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 1 warning sign for Alkyl Amines Chemicals that you should be aware of before investing.

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.

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