Stock Analysis

How Is Britannia Industries' (NSE:BRITANNIA) CEO Compensated?

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Varun Berry has been the CEO of Britannia Industries Limited (NSE:BRITANNIA) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Britannia Industries

Comparing Britannia Industries Limited's CEO Compensation With the industry

Our data indicates that Britannia Industries Limited has a market capitalization of ₹887b, and total annual CEO compensation was reported as ₹98m for the year to March 2020. That's a modest increase of 7.5% on the prior year. In particular, the salary of ₹57.6m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies in the industry with market capitalizations above ₹598b, we found that the median total CEO compensation was ₹151m. Accordingly, Britannia Industries pays its CEO under the industry median. What's more, Varun Berry holds ₹224m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary ₹58m ₹52m 59%
Other ₹40m ₹39m 41%
Total Compensation₹98m ₹91m100%

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. In Britannia Industries' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

NSEI:BRITANNIA CEO Compensation July 10th 2020
NSEI:BRITANNIA CEO Compensation July 10th 2020

A Look at Britannia Industries Limited's Growth Numbers

Over the past three years, Britannia Industries Limited has seen its earnings per share (EPS) grow by 17% per year. It achieved revenue growth of 4.9% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Britannia Industries Limited Been A Good Investment?

We think that the total shareholder return of 102%, over three years, would leave most Britannia Industries Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

As we noted earlier, Britannia Industries pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Considering robust earnings growth, we believe Varun to be modestly paid. Given the strong history of shareholder returns, the shareholders are probably very happy with Varun's performance.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Britannia Industries that investors should be aware of in a dynamic business environment.

Switching gears from Britannia Industries, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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