Shareholders Will Probably Hold Off On Increasing Prozone Realty Limited's (NSE:PROZONER) CEO Compensation For The Time Being

Key Insights

• Prozone Realty to hold its Annual General Meeting on 26th of September
• CEO Bipin Gurnani's total compensation includes salary of ₹14.0m
• The total compensation is 376% higher than the average for the industry
• Prozone Realty's EPS declined by 97% over the past three years while total shareholder return over the past three years was 109%

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Despite strong share price growth of 109% for Prozone Realty Limited (NSE:PROZONER) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 26th of September. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for Prozone Realty

How Does Total Compensation For Bipin Gurnani Compare With Other Companies In The Industry?

According to our data, Prozone Realty Limited has a market capitalization of ₹7.4b, and paid its CEO total annual compensation worth ₹14m over the year to March 2025. This was the same as last year. Notably, the salary of ₹14m is the entirety of the CEO compensation.

For comparison, other companies in the Indian Real Estate industry with market capitalizations below ₹18b, reported a median total CEO compensation of ₹2.9m. This suggests that Bipin Gurnani is paid more than the median for the industry.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. At the company level, Prozone Realty pays Bipin Gurnani solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Prozone Realty Limited's Growth Numbers

Over the last three years, Prozone Realty Limited has shrunk its earnings per share by 97% per year. Its revenue is up 13% over the last year.

Few shareholders would be pleased to read that EPS have declined. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Prozone Realty Limited Been A Good Investment?

We think that the total shareholder return of 109%, over three years, would leave most Prozone Realty Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Prozone Realty pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Prozone Realty that investors should look into moving forward.

Important note: Prozone Realty 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.