Here's Why Shareholders Should Examine Fairchem Organics Limited's (NSE:FAIRCHEMOR) CEO Compensation Package More Closely

Key Insights

• Fairchem Organics' Annual General Meeting to take place on 11th of August
• Total pay for CEO Nahoosh Jariwala includes ₹14.4m salary
• The overall pay is 389% above the industry average
• Fairchem Organics' three-year loss to shareholders was 43% while its EPS was down 31% over the past three years

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Shareholders will probably not be too impressed with the underwhelming results at Fairchem Organics Limited (NSE:FAIRCHEMOR) recently. At the upcoming AGM on 11th of August, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Fairchem Organics

How Does Total Compensation For Nahoosh Jariwala Compare With Other Companies In The Industry?

According to our data, Fairchem Organics Limited has a market capitalization of ₹12b, and paid its CEO total annual compensation worth ₹29m over the year to March 2025. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹14m.

For comparison, other companies in the Indian Chemicals industry with market capitalizations below ₹18b, reported a median total CEO compensation of ₹6.0m. Hence, we can conclude that Nahoosh Jariwala is remunerated higher than the industry median.

Talking in terms of the industry, salary represented approximately 85% of total compensation out of all the companies we analyzed, while other remuneration made up 15% of the pie. Fairchem Organics 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.

A Look at Fairchem Organics Limited's Growth Numbers

Over the last three years, Fairchem Organics Limited has shrunk its earnings per share by 31% per year. Its revenue is down 13% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Fairchem Organics Limited Been A Good Investment?

The return of -43% over three years would not have pleased Fairchem Organics Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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 3 warning signs for Fairchem Organics (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

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.