Here's Why Shareholders May Want To Be Cautious With Increasing Marico Limited's (NSE:MARICO) CEO Pay Packet

CEO Saugata Gupta has done a decent job of delivering relatively good performance at Marico Limited (NSE:MARICO) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 30 August 2021. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Marico

How Does Total Compensation For Saugata Gupta Compare With Other Companies In The Industry?

Our data indicates that Marico Limited has a market capitalization of ₹682b, and total annual CEO compensation was reported as ₹140m for the year to March 2021. That is, the compensation was roughly the same as last year. In particular, the salary of ₹96.9m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the same industry with market caps ranging from ₹297b to ₹892b, we found that the median CEO total compensation was ₹89m. Hence, we can conclude that Saugata Gupta is remunerated higher than the industry median. Moreover, Saugata Gupta also holds ₹308m worth of Marico stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	₹97m	₹89m	69%
Other	₹43m	₹49m	31%
Total Compensation	₹140m	₹138m	100%

Talking in terms of the industry, salary represented approximately 94% of total compensation out of all the companies we analyzed, while other remuneration made up 6% of the pie. Marico sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Marico Limited's Growth Numbers

Marico Limited's earnings per share (EPS) grew 11% per year over the last three years. In the last year, its revenue is up 22%.

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. 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 Marico Limited Been A Good Investment?

We think that the total shareholder return of 48%, over three years, would leave most Marico 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...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Marico that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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