How Is Balmer Lawrie's (NSE:BALMLAWRIE) CEO Compensated?

The CEO of Balmer Lawrie & Co. Ltd. (NSE:BALMLAWRIE) is Adika Sekhar, and this article examines the executive's compensation against the backdrop of overall company performance. 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 Balmer Lawrie

Comparing Balmer Lawrie & Co. Ltd.'s CEO Compensation With the industry

According to our data, Balmer Lawrie & Co. Ltd. has a market capitalization of ₹20b, and paid its CEO total annual compensation worth ₹4.8m over the year to March 2020. Notably, that's an increase of 15% over the year before. Notably, the salary which is ₹2.54m, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between ₹7.2b and ₹29b, we discovered that the median CEO total compensation of that group was ₹19m. That is to say, Adika Sekhar is paid under the industry median.

Talking in terms of the industry, salary represented approximately 65% of total compensation out of all the companies we analyzed, while other remuneration made up 35% of the pie. It's interesting to note that Balmer Lawrie allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Balmer Lawrie & Co. Ltd.'s Growth Numbers

Over the last three years, Balmer Lawrie & Co. Ltd. has shrunk its earnings per share by 18% per year. In the last year, its revenue is down 17%.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Balmer Lawrie & Co. Ltd. Been A Good Investment?

With a three year total loss of 12% for the shareholders, Balmer Lawrie & Co. Ltd. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Adika is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. It's tough to say that Adika is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which shouldn't be ignored) in Balmer Lawrie we think you should know about.

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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