Shareholders Will Probably Hold Off On Increasing Hester Biosciences Limited's (NSE:HESTERBIO) CEO Compensation For The Time Being

Key Insights

• Hester Biosciences will host its Annual General Meeting on 13th of August
• CEO Rajiv Gandhi's total compensation includes salary of ₹19.1m
• The overall pay is comparable to the industry average
• Over the past three years, Hester Biosciences' EPS grew by 6.7% and over the past three years, the total loss to shareholders 10%

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As many shareholders of Hester Biosciences Limited (NSE:HESTERBIO) will be aware, they have not made a gain on their investment in the past three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 13th of August. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for Hester Biosciences

How Does Total Compensation For Rajiv Gandhi Compare With Other Companies In The Industry?

According to our data, Hester Biosciences Limited has a market capitalization of ₹17b, and paid its CEO total annual compensation worth ₹40m over the year to March 2025. That's a notable increase of 8.1% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹19m.

On examining similar-sized companies in the India Biotechs industry with market capitalizations between ₹8.8b and ₹35b, we discovered that the median CEO total compensation of that group was ₹41m. So it looks like Hester Biosciences compensates Rajiv Gandhi in line with the median for the industry. What's more, Rajiv Gandhi holds ₹1.8b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 52% of total compensation represents salary, while the remainder of 48% is other remuneration. There isn't a significant difference between Hester Biosciences and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Hester Biosciences Limited's Growth

Hester Biosciences Limited has seen its earnings per share (EPS) increase by 6.7% a year over the past three years. Its revenue is up 3.2% over the last year.

We're not particularly impressed by the revenue growth, but we're happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. 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 Hester Biosciences Limited Been A Good Investment?

Given the total shareholder loss of 10% over three years, many shareholders in Hester Biosciences Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Hester Biosciences (1 is a bit unpleasant!) that you should be aware of before investing here.

Switching gears from Hester Biosciences, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.