How Is Aditya Birla Capital's (NSE:ABCAPITAL) CEO Compensated?

Ajay Srinivasan has been the CEO of Aditya Birla Capital Limited (NSE:ABCAPITAL) since 2007, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Aditya Birla Capital.

View our latest analysis for Aditya Birla Capital

How Does Total Compensation For Ajay Srinivasan Compare With Other Companies In The Industry?

According to our data, Aditya Birla Capital Limited has a market capitalization of ₹299b, and paid its CEO total annual compensation worth ₹282m over the year to March 2020. That's a notable decrease of 20% on last year. Notably, the salary which is ₹273.0m, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between ₹148b and ₹474b had a median total CEO compensation of ₹108m. Accordingly, our analysis reveals that Aditya Birla Capital Limited pays Ajay Srinivasan north of the industry median. Moreover, Ajay Srinivasan also holds ₹54m worth of Aditya Birla Capital 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 represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Aditya Birla Capital is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Aditya Birla Capital Limited's Growth Numbers

Over the last three years, Aditya Birla Capital Limited has shrunk its earnings per share by 5.7% per year. Its revenue is up 20% over the last year.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Aditya Birla Capital Limited Been A Good Investment?

Given the total shareholder loss of 24% over three years, many shareholders in Aditya Birla Capital Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Ajay receives almost all of their compensation through a salary. As we noted earlier, Aditya Birla Capital pays its CEO higher than the norm for similar-sized companies belonging to the same industry. It concerns us that EPS growth for the company is negative, while share price gains did not materialize over the last three years. On the bright side, at lease revenue growth seems to be marching northward. Suffice it to say, we don't think the CEO is underpaid!

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in Aditya Birla Capital we think you should know about.

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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