Key Things To Understand About SPL Industries' (NSE:SPLIL) CEO Pay Cheque

Mukesh Aggarwal is the CEO of SPL Industries Limited (NSE:SPLIL), and in this article, we analyze the executive's compensation package 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.

View our latest analysis for SPL Industries

Comparing SPL Industries Limited's CEO Compensation With the industry

At the time of writing, our data shows that SPL Industries Limited has a market capitalization of ₹740m, and reported total annual CEO compensation of ₹6.3m for the year to March 2020. That's a modest increase of 4.8% on the prior year. We note that the salary portion, which stands at ₹6.00m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹4.0m. Accordingly, our analysis reveals that SPL Industries Limited pays Mukesh Aggarwal north of the industry median. Moreover, Mukesh Aggarwal also holds ₹157m worth of SPL Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. Investors will find it interesting that SPL Industries pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. 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.

SPL Industries Limited's Growth

SPL Industries Limited's earnings per share (EPS) grew 66% per year over the last three years. Its revenue is down 12% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has SPL Industries Limited Been A Good Investment?

Most shareholders would probably be pleased with SPL Industries Limited for providing a total return of 39% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Mukesh receives almost all of their compensation through a salary. As we noted earlier, SPL Industries pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Mukesh deserves a raise!

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for SPL Industries that investors should be aware of in a dynamic business environment.

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. 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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