Shareholders Will Probably Not Have Any Issues With Hindustan Oil Exploration Company Limited's (NSE:HINDOILEXP) CEO Compensation

CEO Pandarinathan Elango has done a decent job of delivering relatively good performance at Hindustan Oil Exploration Company Limited (NSE:HINDOILEXP) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 28 September 2022. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for Hindustan Oil Exploration

Comparing Hindustan Oil Exploration Company Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Hindustan Oil Exploration Company Limited has a market capitalization of ₹20b, and reported total annual CEO compensation of ₹12m for the year to March 2022. Notably, that's an increase of 12% over the year before. We note that the salary of ₹6.28m makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between ₹8.0b and ₹32b had a median total CEO compensation of ₹12m. So it looks like Hindustan Oil Exploration compensates Pandarinathan Elango in line with the median for the industry. Moreover, Pandarinathan Elango also holds ₹745m worth of Hindustan Oil Exploration stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	₹6.3m	₹6.3m	51%
Other	₹5.9m	₹4.7m	49%
Total Compensation	₹12m	₹11m	100%

On an industry level, around 85% of total compensation represents salary and 15% is other remuneration. Hindustan Oil Exploration sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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 Hindustan Oil Exploration Company Limited's Growth Numbers

Over the last three years, Hindustan Oil Exploration Company Limited has shrunk its earnings per share by 37% per year. Its revenue is up 78% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Hindustan Oil Exploration Company Limited Been A Good Investment?

Boasting a total shareholder return of 45% over three years, Hindustan Oil Exploration Company Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Some shareholders will be pleased by the relatively good results, however, the results could still be improved. We reckon that there are some shareholders who may be hesitant to increase CEO pay further until EPS growth starts to improve, despite the robust revenue growth.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Hindustan Oil Exploration (1 doesn't sit too well with us!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St 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. Simply Wall St has no position in any stocks mentioned.