Shareholders May Not Be So Generous With Venus Remedies Limited's (NSE:VENUSREM) CEO Compensation And Here's Why

Key Insights

• Venus Remedies' Annual General Meeting to take place on 23rd of September
• Salary of ₹6.93m is part of CEO Ashutosh Jain's total remuneration
• The total compensation is 49% higher than the average for the industry
• Venus Remedies' three-year loss to shareholders was 23% while its EPS was down 28% over the past three years

In the past three years, the share price of Venus Remedies Limited (NSE:VENUSREM) has struggled to grow and now shareholders are sitting on a loss. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. The AGM coming up on 23rd of September will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

See our latest analysis for Venus Remedies

How Does Total Compensation For Ashutosh Jain Compare With Other Companies In The Industry?

According to our data, Venus Remedies Limited has a market capitalization of ₹4.7b, and paid its CEO total annual compensation worth ₹7.1m over the year to March 2024. That's just a smallish increase of 5.6% on last year. Notably, the salary which is ₹6.93m, represents most of the total compensation being paid.

For comparison, other companies in the Indian Pharmaceuticals industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹4.8m. Hence, we can conclude that Ashutosh Jain is remunerated higher than the industry median.

Component	2024	2023	Proportion (2024)
Salary	₹6.9m	₹6.6m	97%
Other	₹215k	₹169k	3%
Total Compensation	₹7.1m	₹6.8m	100%

On an industry level, roughly 99% of total compensation represents salary and 1% is other remuneration. Investors will find it interesting that Venus Remedies pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. 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 Venus Remedies Limited's Growth Numbers

Over the last three years, Venus Remedies Limited has shrunk its earnings per share by 28% per year. Its revenue is up 21% over the last year.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Venus Remedies Limited Been A Good Investment?

Given the total shareholder loss of 23% over three years, many shareholders in Venus Remedies Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Ashutosh receives almost all of their compensation through a salary. The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Venus Remedies that you should be aware of before investing.

Switching gears from Venus Remedies, 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.