Here's Why Shareholders May Want To Be Cautious With Increasing Alpa Laboratories Limited's (NSE:ALPA) CEO Pay Packet

Key Insights

• Alpa Laboratories to hold its Annual General Meeting on 29th of September
• Total pay for CEO Paresh Chawla includes ₹8.40m salary
• The total compensation is 64% higher than the average for the industry
• Alpa Laboratories' EPS grew by 36% over the past three years while total shareholder return over the past three years was 61%

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CEO Paresh Chawla has done a decent job of delivering relatively good performance at Alpa Laboratories Limited (NSE:ALPA) recently. As shareholders go into the upcoming AGM on 29th of September, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Alpa Laboratories

Comparing Alpa Laboratories Limited's CEO Compensation With The Industry

Our data indicates that Alpa Laboratories Limited has a market capitalization of ₹2.0b, and total annual CEO compensation was reported as ₹8.4m for the year to March 2025. There was no change in the compensation compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹8.4m.

In comparison with other companies in the Indian Pharmaceuticals industry with market capitalizations under ₹18b, the reported median total CEO compensation was ₹5.1m. Accordingly, our analysis reveals that Alpa Laboratories Limited pays Paresh Chawla north of the industry median. Furthermore, Paresh Chawla directly owns ₹710m 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 99% of total compensation out of all the companies we analyzed, while other remuneration made up 0.79361173% of the pie. Speaking on a company level, Alpa Laboratories prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Alpa Laboratories Limited's Growth Numbers

Alpa Laboratories Limited's earnings per share (EPS) grew 36% per year over the last three years. Its revenue is up 1.3% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Alpa Laboratories Limited Been A Good Investment?

We think that the total shareholder return of 61%, over three years, would leave most Alpa Laboratories Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Alpa Laboratories pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Alpa Laboratories that investors should think about before committing capital to this stock.

Important note: Alpa Laboratories 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.