We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Dhanuka Agritech Limited's (NSE:DHANUKA) CEO For Now

Key Insights

• Dhanuka Agritech to hold its Annual General Meeting on 2nd of August
• CEO Mahendra Dhanuka's total compensation includes salary of ₹12.6m
• The total compensation is 79% higher than the average for the industry
• Dhanuka Agritech's EPS grew by 5.5% over the past three years while total shareholder return over the past three years was 84%

CEO Mahendra Dhanuka has done a decent job of delivering relatively good performance at Dhanuka Agritech Limited (NSE:DHANUKA) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 2nd of August. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Dhanuka Agritech

How Does Total Compensation For Mahendra Dhanuka Compare With Other Companies In The Industry?

According to our data, Dhanuka Agritech Limited has a market capitalization of ₹77b, and paid its CEO total annual compensation worth ₹58m over the year to March 2024. We note that's an increase of 15% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹13m.

On comparing similar companies from the Indian Chemicals industry with market caps ranging from ₹33b to ₹134b, we found that the median CEO total compensation was ₹33m. Hence, we can conclude that Mahendra Dhanuka is remunerated higher than the industry median. What's more, Mahendra Dhanuka holds ₹387m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹13m	₹13m	22%
Other	₹46m	₹38m	78%
Total Compensation	₹58m	₹51m	100%

On an industry level, around 86% of total compensation represents salary and 14% is other remuneration. Dhanuka Agritech sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Dhanuka Agritech Limited's Growth

Over the past three years, Dhanuka Agritech Limited has seen its earnings per share (EPS) grow by 5.5% per year. In the last year, its revenue is up 3.4%.

We'd prefer higher revenue growth, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. 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 Dhanuka Agritech Limited Been A Good Investment?

We think that the total shareholder return of 84%, over three years, would leave most Dhanuka Agritech Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Dhanuka Agritech that investors should look into moving forward.

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