What Does Britannia Industries' (NSE:BRITANNIA) CEO Pay Reveal?

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 assess whether Britannia Industries pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Britannia Industries

Comparing Britannia Industries Limited's CEO Compensation With the industry

At the time of writing, our data shows that Britannia Industries Limited has a market capitalization of ₹869b, and reported total annual CEO compensation of ₹98m for the year to March 2020. That's just a smallish increase of 7.5% on last year. We note that the salary portion, which stands at ₹57.6m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations above ₹585b, reported a median total CEO compensation of ₹148m. Accordingly, Britannia Industries pays its CEO under the industry median.

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. It's interesting to note that Britannia Industries allocates a smaller portion of compensation to salary 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.

A Look at Britannia Industries Limited's Growth Numbers

Britannia Industries Limited has seen its earnings per share (EPS) increase by 25% a year over the past three years. In the last year, its revenue is up 11%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Britannia Industries Limited Been A Good Investment?

We think that the total shareholder return of 61%, over three years, would leave most Britannia Industries Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As we touched on above, Britannia Industries Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. When taking into account the company's strong EPS growth over the past three years, it appears CEO compensation is modest. Given the strong history of shareholder returns, the shareholders are probably very happy with Varun's performance.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 3 warning signs for Britannia Industries that investors should be aware of in a dynamic business environment.

Important note: Britannia Industries 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. 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.
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