We Take A Look At Why Astec LifeSciences Limited's (NSE:ASTEC) CEO Has Earned Their Pay Packet

We have been pretty impressed with the performance at Astec LifeSciences Limited (NSE:ASTEC) recently and CEO Ashok Hiremath deserves a mention for their role in it. Coming up to the next AGM on 28 July 2021, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

Check out our latest analysis for Astec LifeSciences

How Does Total Compensation For Ashok Hiremath Compare With Other Companies In The Industry?

At the time of writing, our data shows that Astec LifeSciences Limited has a market capitalization of ₹27b, and reported total annual CEO compensation of ₹20m for the year to March 2021. That's a notable increase of 45% on last year. Notably, the salary which is ₹12.2m, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from ₹15b to ₹60b, we found that the median CEO total compensation was ₹25m. So it looks like Astec LifeSciences compensates Ashok Hiremath in line with the median for the industry. Furthermore, Ashok Hiremath directly owns ₹499m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	₹12m	₹12m	62%
Other	₹7.5m	₹1.3m	38%
Total Compensation	₹20m	₹14m	100%

Speaking on an industry level, nearly 88% of total compensation represents salary, while the remainder of 12% is other remuneration. It's interesting to note that Astec LifeSciences allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Astec LifeSciences Limited's Growth Numbers

Astec LifeSciences Limited has seen its earnings per share (EPS) increase by 23% a year over the past three years. Its revenue is up 5.7% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Astec LifeSciences Limited Been A Good Investment?

Most shareholders would probably be pleased with Astec LifeSciences Limited for providing a total return of 108% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 2 which don't sit too well with us) in Astec LifeSciences we think you should know about.

Switching gears from Astec LifeSciences, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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