Is Walchandnagar Industries Limited's (NSE:WALCHANNAG) CEO Being Overpaid?

G. Pillai became the CEO of Walchandnagar Industries Limited (NSE:WALCHANNAG) in 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Walchandnagar Industries

How Does G. Pillai's Compensation Compare With Similar Sized Companies?

Our data indicates that Walchandnagar Industries Limited is worth ₹4.0b, and total annual CEO compensation is ₹11m. Notably, that's an increase of 8.0% over the year before. We took a group of companies with market capitalizations below ₹14.7b, and calculated the median CEO compensation to be ₹2m.

Thus we can conclude that G. Pillai receives more in total compensation than the median of a group of companies in the same market, and of similar size to Walchandnagar Industries Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Walchandnagar Industries has changed from year to year.

Is Walchandnagar Industries Limited Growing?

Walchandnagar Industries Limited has increased its earnings per share (EPS) by an average of 18% a year, over the last three years It saw its revenue drop -7.9% over the last year.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end.

Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Walchandnagar Industries Limited Been A Good Investment?

Since shareholders would have lost about 32% over three years, some Walchandnagar Industries Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We examined the amount Walchandnagar Industries Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. So shareholders might not feel great about the fact that CEO pay increased on last year. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Walchandnagar Industries Limited.

Or you might prefer gaze uponthis detailed graph of past earnings, revenue and cash flow .

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.