It's Unlikely That BASF India Limited's (NSE:BASF) CEO Will See A Huge Pay Rise This Year

Key Insights

• BASF India will host its Annual General Meeting on 12th of August
• Total pay for CEO Alexander Gerding includes ₹62.3m salary
• Total compensation is 78% above industry average
• Over the past three years, BASF India's EPS fell by 13% and over the past three years, the total shareholder return was 52%

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Despite strong share price growth of 52% for BASF India Limited (NSE:BASF) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 12th of August. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

See our latest analysis for BASF India

How Does Total Compensation For Alexander Gerding Compare With Other Companies In The Industry?

At the time of writing, our data shows that BASF India Limited has a market capitalization of ₹201b, and reported total annual CEO compensation of ₹78m for the year to March 2025. We note that's a decrease of 16% compared to last year. In particular, the salary of ₹62.3m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Indian Chemicals industry with market capitalizations ranging between ₹88b and ₹281b had a median total CEO compensation of ₹44m. This suggests that Alexander Gerding is paid more than the median for the industry.

On an industry level, around 85% of total compensation represents salary and 15% is other remuneration. BASF India is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

BASF India Limited's Growth

Over the last three years, BASF India Limited has shrunk its earnings per share by 13% per year. Its revenue is up 5.6% over the last year.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has BASF India Limited Been A Good Investment?

We think that the total shareholder return of 52%, over three years, would leave most BASF India 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...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for BASF India that investors should be aware of in a dynamic business environment.

Switching gears from BASF India, 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. 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.