This Is The Reason Why We Think Balmer Lawrie & Co. Ltd.'s (NSE:BALMLAWRIE) CEO Deserves A Bump Up To Their Compensation

Key Insights

• Balmer Lawrie to hold its Annual General Meeting on 27th of September
• Salary of ₹3.26m is part of CEO Adika Sekhar's total remuneration
• The overall pay is 46% below the industry average
• Over the past three years, Balmer Lawrie's EPS grew by 11% and over the past three years, the total shareholder return was 84%

Shareholders will be pleased by the impressive results for Balmer Lawrie & Co. Ltd. (NSE:BALMLAWRIE) recently and CEO Adika Sekhar has played a key role. At the upcoming AGM on 27th of September, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

View our latest analysis for Balmer Lawrie

How Does Total Compensation For Adika Sekhar Compare With Other Companies In The Industry?

According to our data, Balmer Lawrie & Co. Ltd. has a market capitalization of ₹27b, and paid its CEO total annual compensation worth ₹5.9m over the year to March 2023. Notably, that's an increase of 9.5% over the year before. We note that the salary of ₹3.26m makes up a sizeable portion of the total compensation received by the CEO.

On examining similar-sized companies in the India Industrials industry with market capitalizations between ₹17b and ₹66b, we discovered that the median CEO total compensation of that group was ₹11m. In other words, Balmer Lawrie pays its CEO lower than the industry median.

Component	2023	2022	Proportion (2023)
Salary	₹3.3m	₹3.0m	55%
Other	₹2.6m	₹2.4m	45%
Total Compensation	₹5.9m	₹5.4m	100%

Speaking on an industry level, nearly 71% of total compensation represents salary, while the remainder of 29% is other remuneration. Balmer Lawrie pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Balmer Lawrie & Co. Ltd.'s Growth

Balmer Lawrie & Co. Ltd. has seen its earnings per share (EPS) increase by 11% a year over the past three years. It achieved revenue growth of 2.2% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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?

Boasting a total shareholder return of 84% over three years, Balmer Lawrie & Co. Ltd. has done well by shareholders. 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...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

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 1 warning sign for Balmer Lawrie that investors should look into moving forward.

Switching gears from Balmer Lawrie, 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.