We Think Some Shareholders May Hesitate To Increase AMD Industries Limited's (NSE:AMDIND) CEO Compensation

By
Simply Wall St
Published
September 08, 2021
NSEI:AMDIND
Source: Shutterstock

Performance at AMD Industries Limited (NSE:AMDIND) has been reasonably good and CEO Adit Gupta has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 14 September 2021. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for AMD Industries

How Does Total Compensation For Adit Gupta Compare With Other Companies In The Industry?

Our data indicates that AMD Industries Limited has a market capitalization of ₹554m, and total annual CEO compensation was reported as ₹4.8m for the year to March 2021. That's a notable decrease of 59% on last year. In particular, the salary of ₹3.57m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹2.7m. Accordingly, our analysis reveals that AMD Industries Limited pays Adit Gupta north of the industry median. What's more, Adit Gupta holds ₹177m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary ₹3.6m ₹11m 74%
Other ₹1.2m ₹1.2m 26%
Total Compensation₹4.8m ₹12m100%

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. It's interesting to note that AMD Industries allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
NSEI:AMDIND CEO Compensation September 9th 2021

A Look at AMD Industries Limited's Growth Numbers

Over the past three years, AMD Industries Limited has seen its earnings per share (EPS) grow by 138% per year. It achieved revenue growth of 15% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and 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 AMD Industries Limited Been A Good Investment?

AMD Industries Limited has generated a total shareholder return of 16% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 4 warning signs (and 2 which are potentially serious) in AMD Industries we think you should know about.

Important note: AMD Industries 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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