Here's What We Learned About The CEO Pay At Caplin Point Laboratories Limited (NSE:CAPLIPOINT)

Sridhar Ganesan has been the CEO of Caplin Point Laboratories Limited (NSE:CAPLIPOINT) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Caplin Point Laboratories

How Does Total Compensation For Sridhar Ganesan Compare With Other Companies In The Industry?

According to our data, Caplin Point Laboratories Limited has a market capitalization of ₹37b, and paid its CEO total annual compensation worth ₹5.7m over the year to March 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at ₹5.63m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from ₹15b to ₹59b, we found that the median CEO total compensation was ₹23m. This suggests that Sridhar Ganesan is paid below the industry median. What's more, Sridhar Ganesan holds ₹39m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 98% of total compensation represents salary, while the remainder of 2.0% is other remuneration. Caplin Point Laboratories has gone down a largely traditional route, paying Sridhar Ganesan a high salary, giving it preference over 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 Caplin Point Laboratories Limited's Growth Numbers

Over the past three years, Caplin Point Laboratories Limited has seen its earnings per share (EPS) grow by 19% per year. Its revenue is up 24% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Caplin Point Laboratories Limited Been A Good Investment?

Given the total shareholder loss of 27% over three years, many shareholders in Caplin Point Laboratories Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Caplin Point Laboratories pays its CEO a majority of compensation through a salary. As previously discussed, Sridhar is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth over three years is certainly impressive. Considering EPS are on the up, we would say Sridhar is compensated fairly. Shareholders, though, would ideally like to see shareholder returns head north before they agree to any raise.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Caplin Point Laboratories that investors should think about before committing capital to this stock.

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.

If you decide to trade Caplin Point Laboratories, 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@simplywallst.com.