How Does GMM Pfaudler's (NSE:GMMPFAUDLR) CEO Salary Compare to Peers?

This article will reflect on the compensation paid to Tarak Patel who has served as CEO of GMM Pfaudler Limited (NSE:GMMPFAUDLR) since 2015. This analysis will also assess whether GMM Pfaudler pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for GMM Pfaudler

How Does Total Compensation For Tarak Patel Compare With Other Companies In The Industry?

At the time of writing, our data shows that GMM Pfaudler Limited has a market capitalization of ₹60b, and reported total annual CEO compensation of ₹42m for the year to March 2020. We note that's an increase of 36% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹8.5m.

In comparison with other companies in the industry with market capitalizations ranging from ₹30b to ₹119b, the reported median CEO total compensation was ₹29m. This suggests that Tarak Patel is paid more than the median for the industry. What's more, Tarak Patel holds ₹747m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 93% of total compensation represents salary and 7.3% is other remuneration. GMM Pfaudler sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at GMM Pfaudler Limited's Growth Numbers

Over the past three years, GMM Pfaudler Limited has seen its earnings per share (EPS) grow by 24% per year. In the last year, its revenue is up 13%.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has GMM Pfaudler Limited Been A Good Investment?

Boasting a total shareholder return of 510% over three years, GMM Pfaudler Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

As we noted earlier, GMM Pfaudler 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. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. And given most shareholders are probably very happy with recent returns, they might even think that Tarak deserves a raise!

Shareholders may want to check for free if GMM Pfaudler insiders are buying or selling shares.

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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