This Is Why Aurobindo Pharma Limited's (NSE:AUROPHARMA) CEO Can Expect A Bump Up In Their Pay Packet

Key Insights

• Aurobindo Pharma will host its Annual General Meeting on 29th of August
• Total pay for CEO Kambam Reddy includes ₹23.0m salary
• Total compensation is 79% below industry average
• Aurobindo Pharma's total shareholder return over the past three years was 125% while its EPS was down 13% over the past three years

The decent performance at Aurobindo Pharma Limited (NSE:AUROPHARMA) recently will please most shareholders as they go into the AGM coming up on 29th of August. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

Check out our latest analysis for Aurobindo Pharma

How Does Total Compensation For Kambam Reddy Compare With Other Companies In The Industry?

Our data indicates that Aurobindo Pharma Limited has a market capitalization of ₹899b, and total annual CEO compensation was reported as ₹45m for the year to March 2024. Notably, that's an increase of 20% over the year before. Notably, the salary which is ₹23.0m, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the Indian Pharmaceuticals industry with market capitalizations above ₹671b, reported a median total CEO compensation of ₹210m. That is to say, Kambam Reddy is paid under the industry median. Furthermore, Kambam Reddy directly owns ₹50b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹23m	₹19m	51%
Other	₹22m	₹18m	49%
Total Compensation	₹45m	₹37m	100%

Speaking on an industry level, nearly 98% of total compensation represents salary, while the remainder of 2% is other remuneration. Aurobindo Pharma sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Aurobindo Pharma Limited's Growth Numbers

Over the last three years, Aurobindo Pharma Limited has shrunk its earnings per share by 13% per year. In the last year, its revenue is up 17%.

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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Aurobindo Pharma Limited Been A Good Investment?

We think that the total shareholder return of 125%, over three years, would leave most Aurobindo Pharma Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

Shareholders may want to check for free if Aurobindo Pharma insiders are buying or selling shares.

Important note: Aurobindo Pharma 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.