We Think Shareholders Will Probably Be Generous With Narayana Hrudayalaya Limited's (NSE:NH) CEO Compensation

It would be hard to discount the role that CEO Emmanuel Rupert has played in delivering the impressive results at Narayana Hrudayalaya Limited (NSE:NH) recently. Coming up to the next AGM on 27 August 2021, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

View our latest analysis for Narayana Hrudayalaya

How Does Total Compensation For Emmanuel Rupert Compare With Other Companies In The Industry?

Our data indicates that Narayana Hrudayalaya Limited has a market capitalization of ₹102b, and total annual CEO compensation was reported as ₹39m for the year to March 2021. Notably, that's an increase of 26% over the year before. Notably, the salary which is ₹28.0m, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between ₹74b and ₹238b, we discovered that the median CEO total compensation of that group was ₹37m. This suggests that Narayana Hrudayalaya remunerates its CEO largely in line with the industry average.

Component	2021	2020	Proportion (2021)
Salary	₹28m	₹30m	72%
Other	₹11m	₹648k	28%
Total Compensation	₹39m	₹31m	100%

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Narayana Hrudayalaya pays a modest slice of remuneration through salary, as compared to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Narayana Hrudayalaya Limited's Growth Numbers

Over the past three years, Narayana Hrudayalaya Limited has seen its earnings per share (EPS) grow by 71% per year. It achieved revenue growth of 10% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Narayana Hrudayalaya Limited Been A Good Investment?

We think that the total shareholder return of 104%, over three years, would leave most Narayana Hrudayalaya Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Seeing that company performance has been quite good recently, some shareholders may feel that CEO compensation may not be the biggest focus in the upcoming AGM. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Narayana Hrudayalaya that investors should think about before committing capital to this stock.

Important note: Narayana Hrudayalaya 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.
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