Increases to CEO Compensation Might Be Put On Hold For Now at Arrow Greentech Limited (NSE:ARROWGREEN)

Key Insights

• Arrow Greentech's Annual General Meeting to take place on 23rd of September
• Salary of ₹8.10m is part of CEO Shilpan Patel's total remuneration
• The total compensation is 125% higher than the average for the industry
• Arrow Greentech's EPS grew by 41% over the past three years while total shareholder return over the past three years was 677%

Under the guidance of CEO Shilpan Patel, Arrow Greentech Limited (NSE:ARROWGREEN) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 23rd of September. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Arrow Greentech

How Does Total Compensation For Shilpan Patel Compare With Other Companies In The Industry?

At the time of writing, our data shows that Arrow Greentech Limited has a market capitalization of ₹5.8b, and reported total annual CEO compensation of ₹8.1m for the year to March 2023. Notably, that's an increase of 41% over the year before. Notably, the salary of ₹8.1m is the entirety of the CEO compensation.

In comparison with other companies in the Indian Packaging industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹3.6m. Accordingly, our analysis reveals that Arrow Greentech Limited pays Shilpan Patel north of the industry median. Moreover, Shilpan Patel also holds ₹3.2b worth of Arrow Greentech stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2021	Proportion (2023)
Salary	₹8.1m	₹5.7m	100%
Other	-	-	-
Total Compensation	₹8.1m	₹5.7m	100%

On an industry level, roughly 77% of total compensation represents salary and 23% is other remuneration. At the company level, Arrow Greentech pays Shilpan Patel solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Arrow Greentech Limited's Growth

Over the past three years, Arrow Greentech Limited has seen its earnings per share (EPS) grow by 41% per year. Its revenue is up 358% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Arrow Greentech Limited Been A Good Investment?

We think that the total shareholder return of 677%, over three years, would leave most Arrow Greentech Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Arrow Greentech rewards its CEO solely through a salary, ignoring non-salary benefits completely. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Arrow Greentech 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. 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.