Shareholders Will Probably Not Have Any Issues With Oil India Limited's (NSE:OIL) CEO Compensation

Key Insights

• Oil India's Annual General Meeting to take place on 18th of September
• Total pay for CEO Ranjit Rath includes ₹5.14m salary
• Total compensation is 46% below industry average
• Oil India's EPS declined by 3.8% over the past three years while total shareholder return over the past three years was 262%

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The performance at Oil India Limited (NSE:OIL) has been rather lacklustre of late and shareholders may be wondering what CEO Ranjit Rath is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 18th of September. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for Oil India

Comparing Oil India Limited's CEO Compensation With The Industry

According to our data, Oil India Limited has a market capitalization of ₹642b, and paid its CEO total annual compensation worth ₹9.3m over the year to March 2025. This means that the compensation hasn't changed much from last year. Notably, the salary which is ₹5.14m, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the Indian Oil and Gas industry with market capitalizations ranging from ₹354b to ₹1.1t, the reported median CEO total compensation was ₹17m. This suggests that Ranjit Rath is paid below the industry median.

Speaking on an industry level, nearly 62% of total compensation represents salary, while the remainder of 38% is other remuneration. In Oil India's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Oil India Limited's Growth Numbers

Over the last three years, Oil India Limited has shrunk its earnings per share by 3.8% per year. Its revenue is down 6.0% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Oil India Limited Been A Good Investment?

Most shareholders would probably be pleased with Oil India Limited for providing a total return of 262% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. These concerns could be addressed to the board and shareholders should revisit their investment thesis to see if it still makes sense.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Oil India that investors should be aware of in a dynamic business environment.

Important note: Oil India is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.