Shareholders May Be More Conservative With Adani Total Gas Limited's (NSE:ATGL) CEO Compensation For Now

Key Insights

• Adani Total Gas to hold its Annual General Meeting on 25th of June
• Total pay for CEO Suresh Manglani includes ₹15.8m salary
• Total compensation is 80% above industry average
• Over the past three years, Adani Total Gas' EPS grew by 13% and over the past three years, the total loss to shareholders 32%

Shareholders of Adani Total Gas Limited (NSE:ATGL) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 25th of June could be an opportunity for shareholders to bring these concerns to the board's attention. 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.

View our latest analysis for Adani Total Gas

How Does Total Compensation For Suresh Manglani Compare With Other Companies In The Industry?

At the time of writing, our data shows that Adani Total Gas Limited has a market capitalization of ₹1.0t, and reported total annual CEO compensation of ₹69m for the year to March 2024. We note that's an increase of 15% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹16m.

For comparison, other companies in the Indian Gas Utilities industry with market capitalizations above ₹668b, reported a median total CEO compensation of ₹38m. Hence, we can conclude that Suresh Manglani is remunerated higher than the industry median.

Component	2024	2023	Proportion (2024)
Salary	₹16m	₹15m	23%
Other	₹53m	₹45m	77%
Total Compensation	₹69m	₹60m	100%

On an industry level, around 77% of total compensation represents salary and 23% is other remuneration. In Adani Total Gas' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Adani Total Gas Limited's Growth

Adani Total Gas Limited has seen its earnings per share (EPS) increase by 13% a year over the past three years. In the last year, its revenue is up 2.2%.

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

Has Adani Total Gas Limited Been A Good Investment?

The return of -32% over three years would not have pleased Adani Total Gas Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

Shareholders may want to check for free if Adani Total Gas insiders are buying or selling shares.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.

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