We Think Shareholders Are Less Likely To Approve A Large Pay Rise For AAA Technologies Limited's (NSE:AAATECH) CEO For Now

Key Insights

• AAA Technologies to hold its Annual General Meeting on 14th of September
• Total pay for CEO Anjay Agarwal includes ₹7.20m salary
• Total compensation is 140% above industry average
• AAA Technologies' EPS grew by 36% over the past three years while total shareholder return over the past three years was 335%

CEO Anjay Agarwal has done a decent job of delivering relatively good performance at AAA Technologies Limited (NSE:AAATECH) recently. As shareholders go into the upcoming AGM on 14th of September, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for AAA Technologies

How Does Total Compensation For Anjay Agarwal Compare With Other Companies In The Industry?

Our data indicates that AAA Technologies Limited has a market capitalization of ₹1.8b, and total annual CEO compensation was reported as ₹7.2m for the year to March 2024. There was no change in the compensation compared to last year. Notably, the salary of ₹7.2m is the entirety of the CEO compensation.

On comparing similar-sized companies in the Indian IT industry with market capitalizations below ₹17b, we found that the median total CEO compensation was ₹3.0m. Hence, we can conclude that Anjay Agarwal is remunerated higher than the industry median. Furthermore, Anjay Agarwal directly owns ₹389m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹7.2m	₹7.2m	100%
Other	-	-	-
Total Compensation	₹7.2m	₹7.2m	100%

Speaking on an industry level, nearly 94% of total compensation represents salary, while the remainder of 6% is other remuneration. On a company level, AAA Technologies prefers to reward its CEO through a salary, opting not to pay Anjay Agarwal through non-salary benefits. 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 AAA Technologies Limited's Growth Numbers

AAA Technologies Limited has seen its earnings per share (EPS) increase by 36% a year over the past three years. Its revenue is up 2.5% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has AAA Technologies Limited Been A Good Investment?

Boasting a total shareholder return of 335% over three years, AAA Technologies Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

AAA Technologies pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for AAA Technologies that investors should think about before committing capital to this stock.

Important note: AAA Technologies 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.