We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Ester Industries Limited's (NSE:ESTER) CEO For Now

Key Insights

• Ester Industries will host its Annual General Meeting on 26th of September
• CEO Arvind Singhania's total compensation includes salary of ₹19.6m
• Total compensation is 611% above industry average
• Ester Industries' three-year loss to shareholders was 29% while its EPS was down 49% over the past three years

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The underwhelming share price performance of Ester Industries Limited (NSE:ESTER) in the past three years would have disappointed many shareholders. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. Shareholders will have a chance to take their concerns to the board at the next AGM on 26th of September and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

Check out 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 ₹11b, and paid its CEO total annual compensation worth ₹43m over the year to March 2025. We note that's an increase of 42% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹20m.

For comparison, other companies in the Indian Chemicals industry with market capitalizations below ₹18b, reported a median total CEO compensation of ₹6.1m. This suggests that Arvind Singhania is paid more than the median for the industry. Furthermore, Arvind Singhania directly owns ₹305m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 84% of total compensation out of all the companies we analyzed, while other remuneration made up 16% of the pie. Ester Industries sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Ester Industries Limited's Growth

Ester Industries Limited has reduced its earnings per share by 49% a year over the last three years. It achieved revenue growth of 22% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Ester Industries Limited Been A Good Investment?

Since shareholders would have lost about 29% over three years, some Ester Industries Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Ester Industries (2 are a bit concerning!) that you should be aware of before investing here.

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.