Increases to Alpa Laboratories Limited's (NSE:ALPA) CEO Compensation Might Cool off for now

Key Insights

• Alpa Laboratories' Annual General Meeting to take place on 28th of September
• CEO Paresh Chawla's total compensation includes salary of ₹8.40m
• The overall pay is 71% above the industry average
• Over the past three years, Alpa Laboratories' EPS grew by 16% and over the past three years, the total shareholder return was 119%

Performance at Alpa Laboratories Limited (NSE:ALPA) has been reasonably good and CEO Paresh Chawla has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 28th 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 want to keep CEO compensation within reason.

See our latest analysis for Alpa Laboratories

How Does Total Compensation For Paresh Chawla Compare With Other Companies In The Industry?

According to our data, Alpa Laboratories Limited has a market capitalization of ₹2.4b, and paid its CEO total annual compensation worth ₹8.4m over the year to March 2024. This was the same as last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹8.4m.

On comparing similar-sized companies in the Indian Pharmaceuticals industry with market capitalizations below ₹17b, we found that the median total CEO compensation was ₹4.9m. Hence, we can conclude that Paresh Chawla is remunerated higher than the industry median. Furthermore, Paresh Chawla directly owns ₹523m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹8.4m	₹8.4m	100%
Other	-	-	-
Total Compensation	₹8.4m	₹8.4m	100%

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 0.89343488% of the pie. On a company level, Alpa Laboratories prefers to reward its CEO through a salary, opting not to pay Paresh Chawla through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Alpa Laboratories Limited's Growth

Alpa Laboratories Limited has seen its earnings per share (EPS) increase by 16% a year over the past three years. In the last year, its revenue is up 3.2%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Alpa Laboratories Limited Been A Good Investment?

Most shareholders would probably be pleased with Alpa Laboratories Limited for providing a total return of 119% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Alpa Laboratories rewards its CEO solely through a salary, ignoring non-salary benefits completely. 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. 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 compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Alpa Laboratories that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.