What We Learned About Apcotex Industries' (NSE:APCOTEXIND) CEO Pay

This article will reflect on the compensation paid to Abhiraj Choksey who has served as CEO of Apcotex Industries Limited (NSE:APCOTEXIND) since 2010. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Apcotex Industries

How Does Total Compensation For Abhiraj Choksey Compare With Other Companies In The Industry?

Our data indicates that Apcotex Industries Limited has a market capitalization of ₹9.1b, and total annual CEO compensation was reported as ₹12m for the year to March 2020. Notably, that's an increase of 11% over the year before. Notably, the salary which is ₹11.3m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹6.5m. Accordingly, our analysis reveals that Apcotex Industries Limited pays Abhiraj Choksey north of the industry median. What's more, Abhiraj Choksey holds ₹1.2b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. Although there is a difference in how total compensation is set, Apcotex Industries more or less reflects the market in terms of setting the 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.

Apcotex Industries Limited's Growth

Over the last three years, Apcotex Industries Limited has shrunk its earnings per share by 4.3% per year. It saw its revenue drop 12% 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. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Apcotex Industries Limited Been A Good Investment?

With a three year total loss of 7.1% for the shareholders, Apcotex Industries Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As previously discussed, Abhiraj is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Apcotex Industries that investors should be aware of in a dynamic business environment.

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.

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This article by Simply Wall St is general in nature. 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.
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