It's Probably Less Likely That Asian Paints Limited's (NSE:ASIANPAINT) CEO Will See A Huge Pay Rise This Year

Key Insights

• Asian Paints' Annual General Meeting to take place on 25th of June
• Salary of ₹47.9m is part of CEO Amit Syngle's total remuneration
• The overall pay is comparable to the industry average
• Asian Paints' EPS grew by 20% over the past three years while total shareholder loss over the past three years was 0.5%

As many shareholders of Asian Paints Limited (NSE:ASIANPAINT) will be aware, they have not made a gain on their investment in the past three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 25th of June. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Asian Paints

How Does Total Compensation For Amit Syngle Compare With Other Companies In The Industry?

According to our data, Asian Paints Limited has a market capitalization of ₹2.8t, and paid its CEO total annual compensation worth ₹188m over the year to March 2024. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹48m.

In comparison with other companies in the Indian Chemicals industry with market capitalizations over ₹668b, the reported median total CEO compensation was ₹170m. This suggests that Asian Paints remunerates its CEO largely in line with the industry average. Moreover, Amit Syngle also holds ₹1.8m worth of Asian Paints stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹48m	₹41m	25%
Other	₹140m	₹143m	75%
Total Compensation	₹188m	₹184m	100%

Talking in terms of the industry, salary represented approximately 86% of total compensation out of all the companies we analyzed, while other remuneration made up 14% of the pie. In Asian Paints' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Asian Paints Limited's Growth Numbers

Asian Paints Limited's earnings per share (EPS) grew 20% per year over the last three years. In the last year, its revenue is up 2.9%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Asian Paints Limited Been A Good Investment?

Since shareholders would have lost about 0.5% over three years, some Asian Paints Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

So you may want to check if insiders are buying Asian Paints shares with their own money (free access).

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com