What Did Bodal Chemicals' (NSE:BODALCHEM) CEO Take Home Last Year?

Sureshbhai Patel is the CEO of Bodal Chemicals Limited (NSE:BODALCHEM), 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 Bodal Chemicals

Comparing Bodal Chemicals Limited's CEO Compensation With the industry

Our data indicates that Bodal Chemicals Limited has a market capitalization of ₹9.0b, and total annual CEO compensation was reported as ₹55m for the year to March 2020. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹16m.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹6.0m. This suggests that Sureshbhai Patel is paid more than the median for the industry. Furthermore, Sureshbhai Patel directly owns ₹3.1b 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 92% of total compensation out of all the companies we analyzed, while other remuneration made up 8.5% of the pie. Bodal Chemicals pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Bodal Chemicals Limited's Growth

Over the last three years, Bodal Chemicals Limited has shrunk its earnings per share by 16% per year. It saw its revenue drop 3.4% over the last year.

The decline in earnings is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Bodal Chemicals Limited Been A Good Investment?

With a three year total loss of 55% for the shareholders, Bodal Chemicals Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Bodal Chemicals pays its CEO higher than the norm for similar-sized companies belonging to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. Add to that declining earnings growth, and you have the perfect recipe for shareholder irritation. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for Bodal Chemicals that investors should look into moving forward.

Switching gears from Bodal Chemicals, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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