We Discuss Whether Adani Ports and Special Economic Zone Limited's (NSE:ADANIPORTS) CEO Is Due For A Pay Rise

The impressive results at Adani Ports and Special Economic Zone Limited (NSE:ADANIPORTS) recently will be great news for shareholders. This would be kept in mind at the upcoming AGM on 12 July 2021 which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

View our latest analysis for Adani Ports and Special Economic Zone

How Does Total Compensation For Karan Adani Compare With Other Companies In The Industry?

Our data indicates that Adani Ports and Special Economic Zone Limited has a market capitalization of ₹1.4t, and total annual CEO compensation was reported as ₹20m for the year to March 2021. There was no change in the compensation compared to last year. In particular, the salary of ₹17.2m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies in the industry with market capitalizations above ₹596b, we found that the median total CEO compensation was ₹48m. This suggests that Karan Adani is paid below the industry median.

Component	2021	2020	Proportion (2021)
Salary	₹17m	₹17m	86%
Other	₹2.8m	₹2.8m	14%
Total Compensation	₹20m	₹20m	100%

On an industry level, roughly 93% of total compensation represents salary and 7% is other remuneration. Our data reveals that Adani Ports and Special Economic Zone allocates salary more or less in line with the wider market. 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.

Adani Ports and Special Economic Zone Limited's Growth

Adani Ports and Special Economic Zone Limited has seen its earnings per share (EPS) increase by 11% a year over the past three years. In the last year, its revenue is up 9.7%.

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. 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?

We think that the total shareholder return of 98%, over three years, would leave most Adani Ports and Special Economic Zone 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...

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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Adani Ports and Special Economic Zone that you should be aware of before investing.

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. 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.
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