Shareholders Will Probably Hold Off On Increasing Ester Industries Limited's (NSE:ESTER) CEO Compensation For The Time Being

Under the guidance of CEO Arvind Singhania, Ester Industries Limited (NSE:ESTER) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 28 September 2022. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Ester Industries

Comparing Ester Industries Limited's CEO Compensation With The Industry

According to our data, Ester Industries Limited has a market capitalization of ₹14b, and paid its CEO total annual compensation worth ₹152m over the year to March 2022. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹14m.

In comparison with other companies in the industry with market capitalizations ranging from ₹8.0b to ₹32b, the reported median CEO total compensation was ₹18m. This suggests that Arvind Singhania is paid more than the median for the industry.

Component	2022	2021	Proportion (2022)
Salary	₹14m	₹14m	9%
Other	₹137m	₹137m	91%
Total Compensation	₹152m	₹152m	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. It's interesting to note that Ester Industries allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Ester Industries Limited's Growth Numbers

Ester Industries Limited's earnings per share (EPS) grew 47% per year over the last three years. Its revenue is up 31% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Ester Industries Limited Been A Good Investment?

Boasting a total shareholder return of 458% over three years, Ester Industries Limited has done well by shareholders. 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...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Ester Industries (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Important note: Ester Industries is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.