We Discuss Why Ashapura Minechem Limited's (NSE:ASHAPURMIN) CEO May Deserve A Higher Pay Packet

Key Insights

• Ashapura Minechem will host its Annual General Meeting on 29th of September
• Salary of ₹8.00m is part of CEO Hemul Shah's total remuneration
• The overall pay is 69% below the industry average
• Ashapura Minechem's total shareholder return over the past three years was 284% while its EPS was down 26% over the past three years

The decent performance at Ashapura Minechem Limited (NSE:ASHAPURMIN) recently will please most shareholders as they go into the AGM coming up on 29th of September. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

See our latest analysis for Ashapura Minechem

Comparing Ashapura Minechem Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Ashapura Minechem Limited has a market capitalization of ₹28b, and reported total annual CEO compensation of ₹8.0m for the year to March 2023. Notably, that's an increase of 47% over the year before. Notably, the salary of ₹8.0m is the entirety of the CEO compensation.

For comparison, other companies in the Indian Metals and Mining industry with market capitalizations ranging between ₹17b and ₹66b had a median total CEO compensation of ₹26m. Accordingly, Ashapura Minechem pays its CEO under the industry median. Furthermore, Hemul Shah directly owns ₹313k worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	₹8.0m	₹5.4m	100%
Other	-	-	-
Total Compensation	₹8.0m	₹5.4m	100%

Speaking on an industry level, nearly 100% of total compensation represents salary, while the remainder of 0.0956% is other remuneration. Speaking on a company level, Ashapura Minechem prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Ashapura Minechem Limited's Growth Numbers

Ashapura Minechem Limited has reduced its earnings per share by 26% a year over the last three years. It achieved revenue growth of 99% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Ashapura Minechem Limited Been A Good Investment?

Boasting a total shareholder return of 284% over three years, Ashapura Minechem Limited has done well by shareholders. 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.

To Conclude...

Ashapura Minechem rewards its CEO solely through a salary, ignoring non-salary benefits completely. The company's overall performance, while not bad, could be better. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

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 2 warning signs for Ashapura Minechem 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.