We Think Some Shareholders May Hesitate To Increase Prozone Realty Limited's (NSE:PROZONER) CEO Compensation

Key Insights

• Prozone Realty's Annual General Meeting to take place on 30th of September
• CEO Bipin Gurnani's total compensation includes salary of ₹14.0m
• The total compensation is 669% higher than the average for the industry
• Prozone Realty's three-year loss to shareholders was 1.1% while its EPS grew by 58% over the past three years

In the past three years, the share price of Prozone Realty Limited (NSE:PROZONER) has struggled to generate growth for its shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 30th of September. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Prozone Realty

Comparing Prozone Realty Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Prozone Realty Limited has a market capitalization of ₹4.2b, and reported total annual CEO compensation of ₹14m for the year to March 2024. That is, the compensation was roughly the same as last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹14m.

For comparison, other companies in the Indian Real Estate industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹1.8m. Hence, we can conclude that Bipin Gurnani is remunerated higher than the industry median.

Component	2024	2023	Proportion (2024)
Salary	₹14m	₹14m	100%
Other	-	-	-
Total Compensation	₹14m	₹14m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. On a company level, Prozone Realty prefers to reward its CEO through a salary, opting not to pay Bipin Gurnani through 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 Prozone Realty Limited's Growth Numbers

Prozone Realty Limited has seen its earnings per share (EPS) increase by 58% a year over the past three years. It saw its revenue drop 18% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Prozone Realty Limited Been A Good Investment?

Since shareholders would have lost about 1.1% over three years, some Prozone Realty Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Prozone Realty rewards its CEO solely through a salary, ignoring non-salary benefits completely. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might 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.

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.