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Sunil D’souza became the CEO of Whirlpool of India Limited (NSE:WHIRLPOOL) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Sunil D’souza’s Compensation Compare With Similar Sized Companies?
Our data indicates that Whirlpool of India Limited is worth ₹174b, and total annual CEO compensation is ₹81m. (This is based on the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at ₹6.2m. We examined companies with market caps from ₹142b to ₹456b, and discovered that the median CEO compensation of that group was ₹46m.
It would therefore appear that Whirlpool of India Limited pays Sunil D’souza more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Whirlpool of India has changed from year to year.
Is Whirlpool of India Limited Growing?
Over the last three years Whirlpool of India Limited has grown its earnings per share (EPS) by an average of 16% per year (using a line of best fit). It achieved revenue growth of 15% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Whirlpool of India Limited Been A Good Investment?
I think that the total shareholder return of 130%, over three years, would leave most Whirlpool of India Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by Whirlpool of India Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. Shareholders may want to check for free if Whirlpool of India 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.