We Think Indraprastha Medical Corporation Limited's (NSE:INDRAMEDCO) CEO Compensation Looks Fair

Key Insights

• Indraprastha Medical's Annual General Meeting to take place on 21st of September
• Total pay for CEO Shivakumar Pattabhiraman includes ₹23.5m salary
• The total compensation is similar to the average for the industry
• Indraprastha Medical's total shareholder return over the past three years was 233% while its EPS grew by 113% over the past three years

It would be hard to discount the role that CEO Shivakumar Pattabhiraman has played in delivering the impressive results at Indraprastha Medical Corporation Limited (NSE:INDRAMEDCO) recently. Coming up to the next AGM on 21st of September, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Indraprastha Medical

How Does Total Compensation For Shivakumar Pattabhiraman Compare With Other Companies In The Industry?

Our data indicates that Indraprastha Medical Corporation Limited has a market capitalization of ₹15b, and total annual CEO compensation was reported as ₹24m for the year to March 2023. We note that's a small decrease of 7.0% on last year. In particular, the salary of ₹23.5m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the Indian Healthcare industry with market capitalizations between ₹8.3b and ₹33b, we discovered that the median CEO total compensation of that group was ₹24m. From this we gather that Shivakumar Pattabhiraman is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	₹23m	₹26m	97%
Other	₹821k	₹386k	3%
Total Compensation	₹24m	₹26m	100%

Talking in terms of the industry, salary represented approximately 97% of total compensation out of all the companies we analyzed, while other remuneration made up 3% of the pie. Indraprastha Medical 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 Indraprastha Medical Corporation Limited's Growth Numbers

Indraprastha Medical Corporation Limited has seen its earnings per share (EPS) increase by 113% a year over the past three years. In the last year, its revenue is up 20%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Indraprastha Medical Corporation Limited Been A Good Investment?

We think that the total shareholder return of 233%, over three years, would leave most Indraprastha Medical Corporation 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...

Indraprastha Medical pays its CEO a majority of compensation through a salary. The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Indraprastha Medical that investors should look into moving forward.

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.