How Much Is Butterfly Gandhimathi Appliances Limited (NSE:BUTTERFLY) CEO Getting Paid?

V. Lakshminarayanan has been the CEO of Butterfly Gandhimathi Appliances Limited (NSE:BUTTERFLY) since 2011, 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 Butterfly Gandhimathi Appliances

How Does Total Compensation For V. Lakshminarayanan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Butterfly Gandhimathi Appliances Limited has a market capitalization of ₹5.4b, and reported total annual CEO compensation of ₹9.5m for the year to March 2020. Notably, that's an increase of 61% over the year before. In particular, the salary of ₹7.20m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹5.2m. Hence, we can conclude that V. Lakshminarayanan is remunerated higher than the industry median. Furthermore, V. Lakshminarayanan directly owns ₹301m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 88% of total compensation out of all the companies we analyzed, while other remuneration made up 12% of the pie. Butterfly Gandhimathi Appliances 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 Butterfly Gandhimathi Appliances Limited's Growth Numbers

Butterfly Gandhimathi Appliances Limited's earnings per share (EPS) grew 70% per year over the last three years. It saw its revenue drop 11% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Butterfly Gandhimathi Appliances Limited Been A Good Investment?

With a total shareholder return of 16% over three years, Butterfly Gandhimathi Appliances Limited shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

As previously discussed, V. is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, we must not forget that the EPS growth has been very strong over three years. We also think investor returns are steady over the same time period. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't say CEO compensation problematic.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Butterfly Gandhimathi Appliances you should be aware of, and 1 of them is potentially serious.

Important note: Butterfly Gandhimathi Appliances is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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