Here's Why Shareholders Will Not Be Complaining About Ashiana Housing Limited's (NSE:ASHIANA) CEO Pay Packet

Key Insights

• Ashiana Housing to hold its Annual General Meeting on 28th of September
• Total pay for CEO Ankur Gupta includes ₹16.4m salary
• The total compensation is similar to the average for the industry
• Ashiana Housing's total shareholder return over the past three years was 196% while its EPS grew by 118% over the past three years

It would be hard to discount the role that CEO Ankur Gupta has played in delivering the impressive results at Ashiana Housing Limited (NSE:ASHIANA) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 28th of September. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

See our latest analysis for Ashiana Housing

Comparing Ashiana Housing Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Ashiana Housing Limited has a market capitalization of ₹20b, and reported total annual CEO compensation of ₹23m for the year to March 2023. That's a notable increase of 91% on last year. In particular, the salary of ₹16.4m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the Indian Real Estate industry with market capitalizations between ₹8.3b and ₹33b, we discovered that the median CEO total compensation of that group was ₹20m. So it looks like Ashiana Housing compensates Ankur Gupta in line with the median for the industry. Moreover, Ankur Gupta also holds ₹4.0b worth of Ashiana Housing stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	₹16m	₹12m	71%
Other	₹6.6m	-	29%
Total Compensation	₹23m	₹12m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. It's interesting to note that Ashiana Housing allocates a smaller portion of compensation to salary in comparison to the broader industry. 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 Ashiana Housing Limited's Growth Numbers

Ashiana Housing Limited has seen its earnings per share (EPS) increase by 118% a year over the past three years. It achieved revenue growth of 77% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Ashiana Housing Limited Been A Good Investment?

We think that the total shareholder return of 196%, over three years, would leave most Ashiana Housing 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.

In Summary...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

Whatever your view on compensation, you might want to check if insiders are buying or selling Ashiana Housing shares (free trial).

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.