Shareholders May Be Wary Of Increasing Astec LifeSciences Limited's (NSE:ASTEC) CEO Compensation Package

Key Insights

• Astec LifeSciences' Annual General Meeting to take place on 29th of July
• Total pay for CEO Anurag Roy includes ₹21.2m salary
• Total compensation is similar to the industry average
• Astec LifeSciences' EPS declined by 71% over the past three years while total shareholder loss over the past three years was 11%

Shareholders will probably not be too impressed with the underwhelming results at Astec LifeSciences Limited (NSE:ASTEC) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 29th of July. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Astec LifeSciences

Comparing Astec LifeSciences Limited's CEO Compensation With The Industry

According to our data, Astec LifeSciences Limited has a market capitalization of ₹25b, and paid its CEO total annual compensation worth ₹24m over the year to March 2024. That's a notable decrease of 19% on last year. In particular, the salary of ₹21.2m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the Indian Chemicals industry with market capitalizations between ₹17b and ₹67b, we discovered that the median CEO total compensation of that group was ₹24m. This suggests that Astec LifeSciences remunerates its CEO largely in line with the industry average. Moreover, Anurag Roy also holds ₹1.4m worth of Astec LifeSciences 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	₹21m	₹26m	89%
Other	₹2.6m	₹3.0m	11%
Total Compensation	₹24m	₹29m	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. Our data reveals that Astec LifeSciences 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.

A Look at Astec LifeSciences Limited's Growth Numbers

Over the last three years, Astec LifeSciences Limited has shrunk its earnings per share by 71% 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Astec LifeSciences Limited Been A Good Investment?

Since shareholders would have lost about 11% over three years, some Astec LifeSciences Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

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 Astec LifeSciences that investors should be aware of in a dynamic business environment.

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