diff --git a/src/ipa/libipa/agc_mean_luminance.cpp b/src/ipa/libipa/agc_mean_luminance.cpp
index ebdb4d75..ff96a381 100644
--- a/src/ipa/libipa/agc_mean_luminance.cpp
+++ b/src/ipa/libipa/agc_mean_luminance.cpp
@@ -44,6 +44,15 @@ static constexpr uint32_t kNumStartupFrames = 10;
  */
 static constexpr double kDefaultRelativeLuminanceTarget = 0.16;
 
+/*
+ * Maximum relative luminance target
+ *
+ * This value limits the relative luminance target after applying the exposure
+ * compensation. Targeting a value above this limit results in saturation
+ * and the inability to regulate properly.
+ */
+static constexpr double kMaxRelativeLuminanceTarget = 0.95;
+
 /**
  * \struct AgcMeanLuminance::AgcConstraint
  * \brief The boundaries and target for an AeConstraintMode constraint
@@ -134,7 +143,8 @@ static constexpr double kDefaultRelativeLuminanceTarget = 0.16;
  */
 
 AgcMeanLuminance::AgcMeanLuminance()
-	: frameCount_(0), filteredExposure_(0s), relativeLuminanceTarget_(0)
+	: exposureCompensation_(1.0), frameCount_(0), filteredExposure_(0s),
+	  relativeLuminanceTarget_(0)
 {
 }
 
@@ -368,6 +378,15 @@ int AgcMeanLuminance::parseTuningData(const YamlObject &tuningData)
 	return parseExposureModes(tuningData);
 }
 
+/**
+ * \fn AgcMeanLuminance::setExposureCompensation()
+ * \brief Set the exposure compensation value
+ * \param[in] gain The exposure compensation gain
+ *
+ * This function sets the exposure compensation value to be used in the
+ * AGC calculations. It is expressed as gain instead of EV.
+ */
+
 /**
  * \brief Set the ExposureModeHelper limits for this class
  * \param[in] minExposureTime Minimum exposure time to allow
@@ -424,7 +443,8 @@ void AgcMeanLuminance::setLimits(utils::Duration minExposureTime,
  */
 double AgcMeanLuminance::estimateInitialGain() const
 {
-	double yTarget = relativeLuminanceTarget_;
+	double yTarget = std::min(relativeLuminanceTarget_ * exposureCompensation_,
+				  kMaxRelativeLuminanceTarget);
 	double yGain = 1.0;
 
 	/*
diff --git a/src/ipa/libipa/agc_mean_luminance.h b/src/ipa/libipa/agc_mean_luminance.h
index c41391cb..cad7ef84 100644
--- a/src/ipa/libipa/agc_mean_luminance.h
+++ b/src/ipa/libipa/agc_mean_luminance.h
@@ -44,6 +44,11 @@ public:
 
 	int parseTuningData(const YamlObject &tuningData);
 
+	void setExposureCompensation(double gain)
+	{
+		exposureCompensation_ = gain;
+	}
+
 	void setLimits(utils::Duration minExposureTime, utils::Duration maxExposureTime,
 		       double minGain, double maxGain);
 
@@ -84,6 +89,7 @@ private:
 				   double gain);
 	utils::Duration filterExposure(utils::Duration exposureValue);
 
+	double exposureCompensation_;
 	uint64_t frameCount_;
 	utils::Duration filteredExposure_;
 	double relativeLuminanceTarget_;