We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Anjani Portland Cement Limited's (NSE:APCL) CEO For Now

Key Insights

• Anjani Portland Cement to hold its Annual General Meeting on 22nd of September
• Salary of ₹7.82m is part of CEO Nadimpalli Raju's total remuneration
• Total compensation is 178% above industry average
• Anjani Portland Cement's EPS declined by 87% over the past three years while total shareholder return over the past three years was 2.2%

Share price growth at Anjani Portland Cement Limited (NSE:APCL) has remained rather flat over the last few years and it may be because earnings has struggled to grow at all. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 22nd of September. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for Anjani Portland Cement

How Does Total Compensation For Nadimpalli Raju Compare With Other Companies In The Industry?

At the time of writing, our data shows that Anjani Portland Cement Limited has a market capitalization of ₹5.5b, and reported total annual CEO compensation of ₹9.9m for the year to March 2023. We note that's an increase of 20% above last year. We note that the salary portion, which stands at ₹7.82m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Indian Basic Materials industry with market capitalizations below ₹17b, we found that the median total CEO compensation was ₹3.6m. Accordingly, our analysis reveals that Anjani Portland Cement Limited pays Nadimpalli Raju north of the industry median.

Component	2023	2022	Proportion (2023)
Salary	₹7.8m	₹6.4m	79%
Other	₹2.1m	₹1.9m	21%
Total Compensation	₹9.9m	₹8.3m	100%

On an industry level, roughly 86% of total compensation represents salary and 14% is other remuneration. Our data reveals that Anjani Portland Cement allocates salary more or less in line with the wider market. 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.

Anjani Portland Cement Limited's Growth

Over the last three years, Anjani Portland Cement Limited has shrunk its earnings per share by 87% per year. It saw its revenue drop 27% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Anjani Portland Cement Limited Been A Good Investment?

With a total shareholder return of 2.2% over three years, Anjani Portland Cement Limited has done okay by shareholders, but there's always room for improvement. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

To Conclude...

The flat share price growth combined with the the fact that earnings have failed to grow makes us wonder whether the share price will have any further strong momentum. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 4 warning signs for Anjani Portland Cement (2 are concerning!) that you should be aware of before investing here.

Important note: Anjani Portland Cement 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.