How Much Is Adani Ports and Special Economic Zone's (NSE:ADANIPORTS) CEO Getting Paid?

Karan Adani became the CEO of Adani Ports and Special Economic Zone Limited (NSE:ADANIPORTS) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Adani Ports and Special Economic Zone

Comparing Adani Ports and Special Economic Zone Limited's CEO Compensation With the industry

According to our data, Adani Ports and Special Economic Zone Limited has a market capitalization of ₹972b, and paid its CEO total annual compensation worth ₹20m over the year to March 2020. Notably, that's an increase of 33% over the year before. We note that the salary portion, which stands at ₹17.2m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations over ₹589b , the reported median total CEO compensation was ₹32m. This suggests that Karan Adani is paid below the industry median.

Talking in terms of the industry, salary represented approximately 96% of total compensation out of all the companies we analyzed, while other remuneration made up 3.7% of the pie. Adani Ports and Special Economic Zone sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Adani Ports and Special Economic Zone Limited's Growth Numbers

Adani Ports and Special Economic Zone Limited's earnings per share (EPS) grew 1.2% per year over the last three years. Its revenue is down 4.4% over the previous year.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Adani Ports and Special Economic Zone Limited Been A Good Investment?

Adani Ports and Special Economic Zone Limited has generated a total shareholder return of 20% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

As we noted earlier, Adani Ports and Special Economic Zone pays its CEO lower than the norm for similar-sized companies belonging to the same industry. But, shareholder returns and EPS growth have been unimpressive recently. So, even though we don't think CEO compensation is too generous, shareholders will likely want to see more growth before they agree that Karan deserves a raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for Adani Ports and Special Economic Zone that investors should be aware of in a dynamic business environment.

Switching gears from Adani Ports and Special Economic Zone, 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.

If you decide to trade Adani Ports and Special Economic Zone, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.