Here's What We Learned About The CEO Pay At L.G. Balakrishnan & Bros Limited (NSE:LGBBROSLTD)

Balakrishnan Vijayakumar is the CEO of L.G. Balakrishnan & Bros Limited (NSE:LGBBROSLTD), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether L.G. Balakrishnan & Bros pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for L.G. Balakrishnan & Bros

How Does Total Compensation For Balakrishnan Vijayakumar Compare With Other Companies In The Industry?

At the time of writing, our data shows that L.G. Balakrishnan & Bros Limited has a market capitalization of ₹11b, and reported total annual CEO compensation of ₹33m for the year to March 2020. Notably, that's a decrease of 12% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹11m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹4.8m. Accordingly, our analysis reveals that L.G. Balakrishnan & Bros Limited pays Balakrishnan Vijayakumar north of the industry median. Moreover, Balakrishnan Vijayakumar also holds ₹1.1b worth of L.G. Balakrishnan & Bros stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

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 8.2% of the pie. L.G. Balakrishnan & Bros sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

L.G. Balakrishnan & Bros Limited's Growth

Over the last three years, L.G. Balakrishnan & Bros Limited has not seen its earnings per share change much, though there is a slight positive movement. Its revenue is down 8.1% over the previous year.

We would prefer it if there was revenue growth, but the modest EPSgrowth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has L.G. Balakrishnan & Bros Limited Been A Good Investment?

Given the total shareholder loss of 33% over three years, many shareholders in L.G. Balakrishnan & Bros Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we noted earlier, L.G. Balakrishnan & Bros pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing for L.G. Balakrishnan & Bros, and although EPS growth is steady, it hasn't set the world on fire. And the situation doesn't look all that good when you see Balakrishnan is remunerated higher than the industry average. All things considered, we believe shareholders would be disappointed to see Balakrishnan's compensation grow without first seeing an improvement in the performance of the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for L.G. Balakrishnan & Bros that you should be aware of before investing.

Switching gears from L.G. Balakrishnan & Bros, 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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